Donation of property, how much tax do Albanians pay? The new law defines the categories that are excluded

Inheritance or donation of properties by Albanian citizens from one family member to another have caused the income in the state budget from the tax paid to double. Referring to the data from the General Directorate of Taxes, in 2023, 84.4 million ALL were paid in the form of tax by those individuals who made donations or left a legacy, with an increase of +116.6 percent.

The tax value paid last year was based on the old income tax law, according to which donations within the family tree were exempt from taxation. Specifically, according to the law, the income obtained from the transfer of the right of ownership for the apartment and/or land, within the gender relationship in the family, husband, wife, children, only once to a beneficiary, through donation and/or relinquishment of wealth is not taxed. While in other cases the applied tax rate is 15 percent.

While the new law on income tax, which entered into force in January 2024, determines that the following are exempt from taxation: donations and inheritance received by those who would qualify as legal heirs in the first and second order; donations and inheritances received from those who would qualify as legal heirs except for the first and second degree, up to 5 million ALL for taxpayers for immovable assets, and up to 1 million ALL for movable assets for taxpayers. As well as the transfer of the right of ownership to the legal heirs through donation and/or relinquishment of property, when the property derives from compulsory co-ownership.

Even in this case, the exemption from taxation is made if the heir or beneficiary of the gift proves that the donated or inherited items have been taxed in advance or reported by the deceased or the donor. In other cases, the tax rate is 15%.