Luxury property in Albania is selling out quickly as foreigners from all over Europe and the United States discover this Balkan gem. High-end units with affordable pricing are offering investors the potential to get in on a booming tourism market that’s set to see short-term rentals balloon over the next five to ten years, making Albania one of the most sought-out destinations for luxury real estate investment in Europe this year.

But with more and more international investors turning to Albania for its sun-soaked beaches, soaring alpine peaks and booming tourism economy, we get a lot of questions about property taxes in Albania.

The country’s regulatory framework remains shrouded in mystery for many potential buyers. Do foreigners pay property taxes in Albania, and how much are they? What exactly are the regulations around foreigners buying properties and renting them out?

Rest assured, Folie Village has you covered. In this brief primer, we’ll walk you through Albanian property taxes for foreigners. Our flagship real estate development project offers high-end villas with panoramic views, privacy, and direct access to Albania’s most pristine coastline, all of which have attracted investors from Europe and the United States eager to cash in on this up and coming real estate investment destination.

Without much further ado, here’s your primer on Albanian property taxes.

Albania’s Low Property Purchase Tax

In Albania, there is no value added tax (VAT) or stamp duty on residential property purchases. Instead, buyers pay a property transfer tax (also called registration tax) that is incredibly modest by European standards.

• Folie Village buyers typically pay around 2-3% of the villa’s declared value as a one-time property transfer tax.
• Compared to Italy’s 9% or France’s 5.8%, this makes entry into the luxury real estate market refreshingly affordable.
• The tax is paid at the moment the property is registered in your name. There are no hidden fees or excessive bureaucracy.

This low upfront tax allows investors to keep more capital free for renovations, furnishings or short-term rental setup, helping maximize ROI.

No Restrictions for Foreign Buyers in Albania

There are no legal restrictions on foreigners buying property in Albania, including luxury properties like those in Folie Village. You can buy as an individual or through a legal entity (e.g., a company or trust) and do not need residency or citizenship.

That means international investors can take full ownership of their villa, rent it out freely, and enjoy capital appreciation just like a local buyer.

(See our previous post about renting out your property in Albania as a foreigner.)

Annual Property Tax in Albania: Surprisingly Low

Once you own your villa, you’ll pay an annual property tax, based on surface area and location. But don’t expect eye-opening bills, as Albania’s property taxes are among the lowest in Europe.

• For a 200 m² luxury villa at Folie Village, you may pay as little as €100 to €300 annually
• Even with a premium coastal location, the government’s calculation model keeps rates reasonable, especially for newly built properties like our turnkey villas along the sea

This dramatically improves net rental income and long-term ownership costs. With no wealth tax and minimal holding costs, Albania offers a clean runway for capital growth.

Albanian Rental Income Tax is Clear and Profitable

Thinking of renting out your Folie Village villa as a short-term or seasonal holiday home? Many buyers do, and with good reason.

• Albania applies a 15% flat tax on net rental income.
• You can deduct eligible expenses like maintenance, furnishings, management services and more.
• If structured via a company, you may be able to optimize your tax exposure further, especially if you’re running multiple units or operating as a rental business.

Folie Village is positioned to become one of the most sought-after vacation communities on the coast. With the potential to earn €300 – €600 per night in peak season, the ROI on luxury rentals here is among the strongest in the region.

Capital Gains and Exit Strategy in Albania

If and when you decide to sell your villa, Albania applies a 15% capital gains tax on the profit (sale price minus purchase price). However, this is only triggered when you sell, and depreciation or capital improvements may be used to reduce the taxable gain.

Given that prices in premium coastal locations like Folie Village are expected to appreciate rapidly over the next 3 to 5 years, the potential for long-term capital gains is very much expected, especially if you buy early.

Albania is no longer the best-kept secret in Europe. With tourism arrivals breaking records, infrastructure improving fast and the government actively supporting real estate development, prices are expected to rise.

Folie Village offers a rare window of opportunity:

• High-end villas with rental-ready amenities
• Prime coastal location minutes from top beaches
• Full legal ownership for foreign buyers
• Low taxes and light regulations
• Strong projected rental yields and appreciation

Albania’s property tax system is simple, transparent, and investor-friendly, making it the perfect destination for smart buyers seeking high ROI and low taxes. When you pair this with the extraordinary luxury and location of Folie Village, it’s easy to see why so many foreign investors are moving fast to claim their stake.

Whether you’re looking for a summer home, a revenue-generating investment, or a lifestyle upgrade, Folie Village offers the best of all worlds – get in touch with us today to discover your next home in Albania.