Real Property Revaluation Deadline Extended to 2021

Real Property Revaluation Deadline Extended to 2021

TIRANA, December 14

Albanian authorities extended again the deadline for the revaluation of properties for taxation purposes. The new deadline has been postponed to September 2021. Given the COVID-19 situation, the number of applications for revaluation was trivial. Meanwhile, the recent decision will make it possible for more property owners to make a fair assessment of their immovable assets.
All the citizens, physical and legal persons, who own a real-property in Albania are granted the right to evaluate it until September 2021 by paying a reduced rate of 3 percent instead of the 15 percent on the real-property capital gain.
Property owners can apply for revaluation through e-Albania or they can contract the services of licensed experts.

What do you need if you’re an individual?

First, you need to know that the payable tax for individuals for registering this revaluation is three percent (3%) of the difference between the new appraised value and the value of the previously registered act or the revalued value, for which the tax has been paid earlier.

For example, if you paid €50,000 for a property that you’re selling for €70,000, with the revaluation, you will pay three percent instead of 15 percent on the capital gain.
Property capital gain €70,000 – €50,000 = €20,000
15% of €20,000 is €3,000
3% of €20,000 is €600

The revalued amount will thus serve as a basis for calculating the realized gain in the case of a transfer of ownership of the real property in the future. The capital gain tax will be taxable at the moment of transfer with the defined rate (currently 15 percent).
If someone revaluated the property at the value of €70,000 and is selling it for €65,000, the revaluation assessment is used as the highest value for the calculation of the capital gain.
(Revaluation price – minimal fiscal price) x 15%
If the minimal fiscal price in force and reevaluation price are the same, the owner pays no tax.
(70,000 – 70,000) x 15% = 0
If the minimal fiscal price is higher than the revaluation price, for example, €75,000, this will be the highest value for the calculation of the capital gain tax
(Minimal fiscal price – revaluation price) x 15%
(75,000 – 70,000) x 15% = 750

The tax will be higher if the property assessment was done many years ago or if there’s no revaluation price at all.

The law clearly defines that the value market can’t be less than minimal fiscal prices. If it’s less, the revaluation will be conducted by the State Agency of Cadaster at the minimal fiscal prices.
Individuals can revaluate a real-property with the service of a real-estate expert licensed by the responsible authorities or by the local offices of the State Agency of Cadaster.
The minimal fiscal price is also used for registered properties that lack a purchase agreement. See below for the official verdict of minimal prices in force for each district.

Property revaluation for legal persons

Like the physical individual, legal persons are granted the right to make a revaluation of their property at market value if it’s lower than the minimal fiscal price current into effect. The property assessment is conducted by independent experts who are licensed to provide this service. Legal entities will have to pay 5 percent of the difference between the revalued amount and the carrying amount registered for real estate.

Read also: Real estate in Albania

No Tax Implications on Real Estate Transfer to Family Members

How to Get Albanian Residence Permit through Real Estate Purchase

Source: local media

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