Property tax, how is the "revenue cake" divided? - Buildings account for 78%, 6.4 million euros of property transactions
Property tax is one of the main sources that supplies the budgets of the 61 municipalities in the country. During 2024, local governments have accumulated about 7.7 billion lek or 77 million euros from property tax. In other words, 15 million euros or 24% more were collected than a year earlier.
Referring to the annual report on local finances for the past year, the increase in revenues from this source is a very positive signal, as in the past three years, revenues were at the same level.
But how is the revenue "pie" divided by this item?
Data shows that the tax on buildings, although not yet applied on the market value in all municipalities, accounts for 78% of the share of total property tax revenues, or about 6 billion lek.
Next in line are revenues from taxes on agricultural land, which account for 9% of the total, 689 million lek or about 7 million euros.
The tax on transactions carried out with real estate, i.e. the tax paid by citizens for the sale and purchase of properties, is 8%, and translated into monetary value amounts to 635 million lek or 6.4 million euros.
Meanwhile, revenues from land taxes account for 5% of the total, contributing to local budgets in the amount of 360 million lek or 3.6 million euros.
This performance was influenced by the increase in construction areas, the development that this sector has received mainly in coastal areas, as well as the increase in the number of transactions. The Municipality of Tirana has the largest share in the collection of this tax, followed by municipalities in coastal areas and other large units.
The government anticipates collecting approximately 20 million euros in additional property tax in 2025, which will be generated due to the functionalization of the fiscal cadastre this year, which will serve for more efficient collection of the building tax.
Referring to data from the Ministry of Finance, based on the sources of the State Cadastre Agency, the declaration itself and data recorded by municipalities, the number of taxable property units is 797,331 (where around 385,243 property units that are incomplete with information are subject to presumption rules in order to calculate the tax value) and the number of property units complete with information is around 412,088 units.
The new law on the taxation of real estate buildings based on market value begins to apply from January 1, 2026, while for plots from 2028. Currently, only 385 thousand properties are taxed with this formula.
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