According to The Serbian Economist, Albania’s Ministry of Finance has submitted a draft bill for public discussion that would increase property taxes and revise the system of tax breaks for homeowners.
Under the proposal, the tax on residential real estate could rise from the current 0.05% of the property’s value to 0.1–0.2%. Higher rates are also proposed for commercial properties, with the total tax burden depending on the property category and its intended use.
One of the key changes concerns owners of second and subsequent properties. If the property is not their primary residence, tax exemptions will not apply. Thus, owners of vacation homes, investment apartments, and additional housing will have to pay the full rate.
In effect, the government is attempting to distinguish between social housing and investment real estate. For families who own only one apartment, the tax increase may be partially offset. For owners of multiple properties, the tax burden will rise more significantly.
The reform is particularly important for Albania’s real estate market, where housing prices have risen rapidly in recent years in Tirana, Durres, Vlora, Saranda, and other locations linked to tourism and investment demand. Amid active construction, interest from foreign buyers, and the growth of short-term rentals, the government is seeking to increase local budget revenues and align property taxation more closely with the market value of assets.
Albania is gradually transitioning from the old model of fixed or low taxes to a more modern system where the tax base is tied to the property’s value. This approach is in line with the recommendations of international financial organizations, but it could prove painful for property owners, especially if the cadastral and market valuations of residential properties are revised upward.
For foreign investors, these changes mean that the annual cost of maintaining a second home on the coast or an investment property in Tirana will become somewhat more expensive. That said, even after the increase, the tax burden in Albania will remain relatively moderate compared to many EU countries.
The key question for the market is how exactly the authorities will assess property values and how quickly the new system will be implemented in practice.
The Albanian real estate market remains one of the most dynamic in the Balkans. Growth in tourism, the development of coastal cities, and interest from foreigners are sustaining demand; however, the tax increase could gradually cool speculative purchases and widen the gap between residential housing and investment real estate.
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Ukraine and Albania have signed an agreement on international road transport, which provides for regular freight and passenger transportation, according to Deputy Prime Minister for Recovery and Minister of Community and Territorial Development Oleksiy Kuleba.
“In practice, this means more opportunities for exporting Ukrainian goods, simplifying operations for carriers, developing new transport routes through the countries of Southeast Europe, and improving transport accessibility for citizens of both countries,” Kuleba wrote on Telegram on Tuesday.
According to him, Albania has now become the 37th country with which Ukraine will have “transport visa-free travel.”
It is noted that the ministry is also continuing to work on expanding Ukraine’s international transport links and opening new markets for carriers.
ALBANIA, CARRIERS, ROAD TRANSPORT, transport visa-free travel, UKRAINE
According to Serbian Economist, a project to build a large resort on the Albanian coast linked to Jared Kushner and Ivanka Trump has faced protests and environmental criticism due to its proximity to protected natural areas inhabited by flamingos, sea turtles, and other species.
The project in question is a tourism development on Albania’s Adriatic coast, in the area of Vlorë, Sazan Island, and the Vjosa-Narta zone. Thousands of Albanian residents took to the streets in Tirana to protest against a resort complex worth approximately EUR 1.4 billion linked to Jared Kushner’s investment firm, Affinity Partners. The project involves the creation of a luxury tourist complex on one of the most valuable stretches of the Albanian coast.
Environmentalists’ main concerns stem from the fact that construction could impact natural areas near the Narta Lagoon and the Vjosa-Narta region, which is considered a critical habitat for migratory birds and other species. Activists point out that the region is home to pink flamingos, seals, and sea turtles, and that large-scale development could damage coastal ecosystems.
BirdLife International stated that work related to the resort threatens one of Europe’s most important coastal habitats. The organization claims that construction and preparatory work could damage areas critical for biodiversity and migratory birds.
The protests have been dubbed the “flamingo revolution” by Albanian and international media. Protesters are using flamingos as a symbol of the protection of the natural area. According to media reports, the protests intensified after fences and construction equipment appeared on part of the site, as well as following reports of clashes between activists and security guards.
Albanian Prime Minister Edi Rama defends the project, stating that it is important for the development of high-end tourism and attracting foreign investment. According to Reuters and AP, authorities view the development as part of a strategy to transform Albania into a more prominent destination for premium tourism on the Adriatic.
Critics, for their part, point to the need for greater transparency, environmental impact assessments, and public debate. At the heart of the controversy are not only flamingos and sea turtles, but also a broader question: can Albania develop luxury tourism without losing natural areas that are themselves part of the country’s tourist appeal?
The project has also taken on a political dimension due to its connection to the family of U.S. President Donald Trump. Jared Kushner is his son-in-law, and Ivanka Trump has publicly supported the idea of developing a tourism project in Albania. At the same time, international media emphasize that this is a private development project linked to Kushner’s investment firm, not a U.S. government project.
For Albania, the conflict surrounding the resort has become a test for its entire model of tourism development. The country is actively promoting the Adriatic and Ionian coasts as an alternative to the more expensive Mediterranean markets, but the growth in investment is increasing pressure on natural areas, infrastructure, and local communities.
According to Serbian Economist, Albania is stepping up tax oversight of the short-term rental market, which has become one of the country’s fastest-growing segments of the tourism real estate sector in recent years. The tax administration has launched a sectoral plan for the tourism sector through 2026, under which the activity of property owners on Airbnb, Booking.com, and other platforms will be cross-checked against tax returns.
In essence, Albania is becoming one of the first countries in Europe to transition tax oversight of short-term rentals via digital platforms to an automated format using artificial intelligence. This makes the country a regional test case for stricter control over revenue from tourism real estate.
The main tool of the new control system will be an AI-based automated monitoring system. Algorithms will scan the Albanian segments of Airbnb and Booking on a weekly basis, analyzing nightly rates, price trends, actual occupancy rates, booking calendars, as well as the number and dates of guest reviews.
Private homeowners renting out one or more apartments through Airbnb and Booking are not required to register as sole proprietors, but must file an annual individual DIVA tax return and pay income tax at a rate of 15%. The tax is calculated on net income after deducting the platform’s commission. Separate clarifications regarding new obligations for short-term rentals starting in 2026 also highlight the use of DIVA as a digital system for reporting individual income.
The authorities are paying special attention to VAT. In Albania’s tourism sector, a reduced rate of 6% applies instead of the standard 20%, but it may only be applied by properties that have passed a physical inspection and received an official classification certificate from the Ministry of Tourism. If an owner applies the 6% rate without such a certificate, the tax authority may retroactively assess VAT at the full 20% rate, along with fines and penalties.
Another requirement concerns cashless payments. By May 30, 2026, all accommodation facilities in Albania, including hotels, hostels, campgrounds, and certified guesthouses, must install physical POS terminals to accept payments. At the same time, the limit on cash transactions between commercial entities has been reduced from 150,000 to 100,000 lek.
For the real estate market, this marks the end of a period of lax oversight of income from short-term rentals. In recent years, Albania has experienced an investment boom in resort real estate, particularly along the coast, where buyers have relied on income from tourist rentals.
But now, the profitability of such properties will increasingly depend not only on occupancy and price, but also on the owner’s tax compliance.
For foreign investors, the new rules mean they must consider the property’s tax model in advance.
The Albanian model reflects a broader trend in the region. Montenegro is also tightening control over payments and taxes in the real estate and tourism sectors, but Albania is taking the next step—using digital monitoring and AI to compare actual activity on platforms with tax reporting.
According to Serbian Economist, Albania has revised its rules for foreigners, significantly simplifying the process of applying for residence and work permits. Under the new regulations, foreign nationals can now submit their applications entirely online, and a temporary confirmation of their right to stay must be issued within one business day of application. This was reported by the Albanian state agency ATA.
The reform applies to foreign residents as well as entrepreneurs and employees applying for residence and work permits. The authorities have standardized the lists of required documents, allowed financial and supporting documents to be submitted in Albanian or English, and clarified procedures for specific categories of employment.
Albania is taking another step toward a more liberal regime for foreign business and long-term residency. For entrepreneurs, the most important aspect is that the administrative part of the process becomes faster and more predictable, while for residents, it is that some of the previous delays between submitting documents and confirming legal status are being eliminated. This is particularly important for the real estate market, small businesses, services, and remote work, where the foreign presence in the country has grown significantly in recent years.
Against the backdrop of this reform, Albania remains a country with a relatively significant foreign presence. According to INSTAT, as of the end of 2024, there were 21,940 foreigners with residence permits in the country. The main reason for obtaining permits was employment—54.3%, followed by family reunification—24.5%, other grounds—16.3%, education—4.0%, and humanitarian reasons—0.9%.
Official INSTAT statistics show that the largest groups of foreigners with residence permits in Albania in 2024 were from Kosovo—4,592 people, Italy—3,763, as well as Turkey, India, and the Philippines.
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Foreign buyers are increasingly entering the Albanian real estate market, but in some cases they are purchasing properties at higher prices than local residents. This is particularly noticeable in popular tourist destinations, especially in Saranda, on the Albanian Riviera, and in central Tirana.
According to experts, in certain high-demand markets, foreigners may pay 5–10% more for comparable properties than local buyers. For an apartment costing around EUR 150,000, the overpayment can range from EUR 500 to EUR 15,000.
As noted, the price difference is not solely due to the buyer’s foreign status. The final price is influenced by the remote nature of negotiations, high demand for move-in-ready housing, and increased interest in properties with sea views, which are inherently more expensive. Another factor is the limited access foreigners have to off-market listings, whereas locals often receive information about sales through personal connections.
At the same time, many foreign buyers generally view their transaction experiences in Albania positively. Among the advantages, they cite the friendliness of local professionals and the relatively straightforward notarization process compared to several other Mediterranean countries.
For the Albanian market, this trend implies a further strengthening of the role of external demand, particularly in tourist areas. In the medium term, this may support price growth in coastal regions, but simultaneously widen the gap between purchasing conditions for locals and foreigners.
