Albania Rental Property Tax: The Reporting Obligations Foreign Landlords Miss

This guide is for foreign nationals who own residential or commercial property in Albania and rent it out on a long-term basis (contracts of 30 days or more). It covers the 15% flat rental income tax, notarized contract requirements, monthly withholding filings, annual DIVA declarations, local property tax, non-resident obligations, and common compliance mistakes.

If you rent property on a short-term basis through Airbnb, Booking.com, or similar platforms, see our dedicated Airbnb rental tax guide. Short-term rentals follow a different tax regime with business registration, fiskalizimi, and tourist tax obligations that do not apply to long-term landlords.

Albania taxes rental income from Albanian property regardless of where the owner lives. If you own an apartment in Tirana and live in London, Rome, or New York, Albania considers that rental income Albanian-source income under Law No. 29/2023 "On Income Tax" and taxes it at a flat 15% rate. Your home country may also tax the same income, but Albania's double tax treaties with most European and North American countries ensure you receive a credit for the Albanian tax paid.

For a broader overview of buying and owning property in Albania as a foreigner, including ownership rules and transfer taxes, see our property purchase guide.

Albania applies a 15% flat tax on gross rental income for individual property owners. "Gross" means the full rent received, with no deduction for expenses such as maintenance, repairs, or property management fees. This is simpler than many European systems but means you cannot reduce your taxable base by documenting costs.

The 15% rate applies under Article 33 of Law No. 29/2023 to income received by natural persons from the rental of immovable property located in Albania. It covers residential leases, commercial property rentals, and land rentals where the landlord is an individual (not a business entity).

How the tax is collected depends on who your tenant is:

• Tenant is a company or business entity: The tenant must withhold 15% from each rent payment and remit it to the DPT (Drejtoria e Pergjithshme e Tatimeve) by the 20th of the following month. You receive 85% of the rent. The tenant provides you with a withholding certificate.
• Tenant is an individual person: No withholding applies. You declare the full rental income on your annual DIVA declaration (Deklarata Individuale Vjetore e te Ardhurave) by March 31 of the following year and pay the 15% tax directly.

Example: You own an apartment in Blloku, Tirana, and rent it to an Albanian family for ALL 80,000/month (ALL 960,000/year, roughly EUR 9,230). The tenants are individuals, so no withholding occurs during the year. By March 31 of the following year, you file DIVA and pay ALL 960,000 x 15% = ALL 144,000 (~EUR 1,385) in rental income tax.

If the same apartment were rented to a company for employee housing at the same rate, the company would withhold ALL 12,000/month (15% of ALL 80,000) and remit it to the DPT by the 20th of each following month. You would receive ALL 68,000/month net.

Albanian law requires that all rental contracts for immovable property be notarized (kontrate noteriale). Under the Civil Code (Article 601 and related provisions) and enforcement regulations, a rental agreement must be executed before a licensed Albanian notary to have legal standing.

What the notarization involves:

• Both landlord and tenant (or their authorized representatives with notarized powers of attorney) must appear in person before the notary
• The contract must specify: the property address and cadastral reference, the monthly rent amount, the payment schedule, the lease duration, and the obligations of both parties
• The notary registers the contract with the local tax office (DPT) and the ASHK (Agjencia Shteterore e Kadastres)
• The notary fee is typically ALL 3,000 to ALL 10,000 depending on the contract value and the notary's rates

Why notarization matters for tax compliance:

The DPT cross-references registered rental contracts against DIVA declarations. If you have a notarized rental contract on file but no corresponding rental income on your DIVA declaration, expect an audit notification. Conversely, if you rent property without a notarized contract, you have no legal protection in disputes and face penalties for operating an unregistered rental arrangement.

Since January 2024, the DPT has intensified cross-matching of property ownership records (from ASHK) with rental contract registrations and DIVA filings. Foreign owners with registered properties who show no rental income and no personal occupancy record are increasingly flagged for compliance review.

When your tenant is a company or business entity, they act as a withholding agent under Albanian tax law. The withholding process follows a strict monthly calendar:

1. Tenant pays rent during the month (e.g., January rent paid on January 5)
2. Tenant withholds 15% from the gross payment
3. Tenant files the withholding declaration and remits the withheld amount to the DPT by the 20th of the following month (e.g., February 20 for January rent)
4. Tenant provides a withholding certificate to you showing the gross amount, the tax withheld, and the net amount paid

The withholding declaration is filed electronically through the DPT's e-filing system. The specific form is the Deklarata e Tatimit ne Burim (withholding tax declaration).

Your role as the landlord: You do not file the monthly withholding declaration yourself. That is your tenant's obligation. However, you should:

• Confirm with your tenant that they are actually filing and remitting the withheld amounts (non-compliance by the tenant can create complications for you)
• Collect and retain all withholding certificates, as you will need them when filing your annual DIVA declaration to claim credit for the taxes already paid on your behalf
• If your tenant fails to withhold and remit, the DPT can pursue both the tenant (for the withholding obligation) and you (for the underlying tax liability)

For the full schedule of Albanian tax filing deadlines, see our tax deadlines guide. For a comprehensive explanation of how withholding tax works across all income types, see our withholding tax guide.

Every individual earning rental income in Albania must file the DIVA declaration (Deklarata Individuale Vjetore e te Ardhurave) by March 31 of the year following the income year. This applies to both Albanian residents and non-residents with Albanian-source income.

What to declare:

• Total gross rental income received during the calendar year
• Any withholding tax already paid by company tenants (supported by withholding certificates)
• The net tax payable (gross rental income x 15% minus withholding tax already remitted)

Filing for non-residents:

If you are not an Albanian tax resident, you must still register with the DPT as a non-resident taxpayer with Albanian-source income and file the annual declaration. The process requires:

• Obtaining an Albanian tax identification number (NID)
• Appointing a fiscal representative in Albania if you do not have a permanent establishment (recommended but not always legally required for passive rental income)
• Filing the non-resident income declaration through the DPT system or through your fiscal representative

Payment timing: The tax balance (total 15% liability minus any withholding already remitted) is due by March 31 alongside the DIVA filing. Late payment triggers a daily interest penalty of 0.06% on the unpaid balance, plus a flat ALL 10,000 (~EUR 96) penalty for late filing.

For detailed DIVA filing instructions, see our DIVA declaration guide.

Separately from income tax on rent, Albania levies an annual local property tax (tatimi mbi prone) on all property owners, including foreigners. This is a municipal tax collected by the local bashki (municipality), not by the national DPT.

Tax rates under Law No. 9632/2006 (as amended):

The assessed value is determined by the municipality using standard coefficients based on location zone, property type, and size. Municipal assessed values are typically lower than actual market values. For a standard 80 m² apartment in central Tirana, expect an annual property tax of ALL 50,000 to ALL 120,000 (~EUR 480 to EUR 1,150).

Payment deadlines:

• First installment: by June 30
• Second installment: by December 31
• Late payment penalty: 0.06% per day on the unpaid balance

Registration requirement: Your property must be formally registered at ASHK in your name. If you completed the purchase but have not registered title at ASHK, you may not receive tax assessment notices, but the liability still accrues. Complete the ASHK registration through your notary promptly after purchase.

Under the standard 15% flat tax regime for individual landlords, no expense deductions are permitted. The 15% applies to gross rent with no offset for maintenance, repairs, insurance, property management fees, or mortgage interest. This is the trade-off for simplicity.

The business entity alternative:

If you register your rental activities as a Person Fizik (sole trader) or hold property through an Sh.p.k. (limited liability company), you move into the business income tax regime. In that case:

• Depreciation on the building (2-5% annually under National Accounting Standards) and fixtures is deductible
• Maintenance and repair costs are deductible (capital improvements must be capitalized)
• Property management fees are deductible
• Insurance premiums on the property are deductible
• Mortgage interest on business property loans may be deductible
• The applicable tax rates are business income tax rates, including the 0% transitional rate through 2029 for eligible Person Fizik income under Article 69 of Law 29/2023

When the business entity route makes sense:

• You own multiple rental properties in Albania
• Your annual maintenance and management costs are significant relative to rental income
• You plan to expand your Albanian property portfolio
• You want to take advantage of the 0% transitional rate (available through 2029 for qualifying businesses)

The decision between individual ownership and business entity ownership is a structural tax planning question that should be evaluated with your accountant before purchasing or restructuring.

Your tax residency status in Albania affects how your rental income obligations work, but the 15% rate on gross rent applies equally to residents and non-residents.

Non-resident property owners:

• Taxed only on Albanian-source income (the rental income from Albanian property)
• Must register with the DPT as a non-resident taxpayer
• May need to appoint a fiscal representative
• If the tenant is a company, the 15% withholding satisfies the tax obligation on that income
• If the tenant is an individual, the non-resident must file and pay directly
• Double tax treaty provisions determine how Albania-paid tax interacts with home-country tax. Albania has treaties with Italy, Germany, the UK, France, Greece, Turkey, and 40+ other countries. See our double tax treaty guide

Resident property owners (expats living in Albania):

• Taxed on worldwide income, including Albanian rental income
• File the standard DIVA declaration by March 31
• Can claim withholding certificates from company tenants as credits against the annual liability
• May also owe tax on foreign income (rental income from property outside Albania, if any)
• For comprehensive expat tax guidance, see our expat tax guide

The 183-day rule: You become an Albanian tax resident if you are physically present in Albania for 183 or more days in any 12-month period. This is tracked by passport stamps and border records. Becoming a tax resident changes your worldwide income obligations but does not change the 15% rate on Albanian rental income specifically.

Beyond the notarized contract and DPT registration, certain municipalities require separate registration of rental activity at the municipal level. In Tirana, the Municipality (Bashkia Tirane) maintains a registry of rental properties for enforcement of local property tax, building safety compliance, and housing regulation.

What municipal registration involves:

• Submitting a copy of the notarized rental contract to the municipal office (zyra e tatimeve vendore)
• Providing proof of property ownership (ASHK certificate)
• The municipality may issue a confirmation of rental registration

Practical note: Municipal enforcement of rental registration varies significantly across Albania. Tirana has the most active enforcement; smaller municipalities may have minimal oversight. However, non-registration does not eliminate the legal obligation. If the DPT or municipality identifies an unregistered rental arrangement during an audit or cross-check, penalties apply retroactively.

Based on our experience advising dozens of foreign property owners in Tirana, these are the most frequent compliance failures:

1. Renting without a notarized contract. Informal rental arrangements (cash payments, handshake agreements) are both illegal and risky. Without a notarized contract, you have no legal recourse in tenant disputes, and if the DPT identifies the arrangement, you face back taxes plus penalties.
2. Not declaring rental income on DIVA. Some foreign owners assume that if their tenant is an individual and no withholding occurs, no tax is due. The 15% obligation exists regardless. The DPT cross-references property ownership records with DIVA filings and is increasingly effective at identifying unreported rental income.
3. Missing the monthly withholding deadline. If your tenant is a company but fails to withhold and remit by the 20th of the following month, penalties accrue. As the landlord, confirm that your tenant is fulfilling their withholding obligations. Request withholding certificates regularly.
4. Not registering as a non-resident taxpayer. Foreign owners who do not live in Albania often assume they have no filing obligations. Albanian-source income requires DPT registration and annual filing regardless of residency.
5. Ignoring local property tax. The annual property tax (tatimi mbi prone) is a separate obligation from income tax on rent. Missing it results in accumulating penalties that compound over time.
6. Not updating contracts when rent changes. If you increase the rent mid-lease, the new amount should be documented in an addendum to the notarized contract and declared accordingly. Discrepancies between the registered rent and actual payments received are a common audit trigger.
7. Confusing long-term and short-term rental rules. If you occasionally rent your property for short stays (under 30 days) through platforms while also having a long-term tenant, the short-term activity may trigger separate business registration requirements. Keep the two activities clearly separated or consult your accountant.

If any of these situations apply to you, voluntary regularization is always preferable to waiting for a DPT audit. We regularly assist foreign property owners in Tirana with bringing their rental operations into full compliance.

Disclaimer: This article is provided for general informational purposes only and does not constitute legal, tax, or financial advice. Albanian tax law is subject to change, and individual circumstances vary. We recommend consulting with a qualified Albanian accountant before making decisions based on this content.