Inheritance and gift tax. Who is exempt and when is it paid 15%

The inheritance and gift tax in Albania does not apply to everyone. Within the immediate family, no tax is paid, no matter how large the estate. Outside that, a 15% tax is paid, and it is precisely the line between these two cases that is most often confused.

The two most common misconceptions

Two misconceptions are repeated on this topic. The first is that any gift within the family is tax-free, without checking whether the person actually falls into the first or second order of heirs. Others think that a lottery win doesn't have to be reported because the money already came in cash.

This text provides the exclusion circle, the two thresholds that apply outside it, the method for valuing assets, the special treatment of gambling winnings, and the sources from which the tax administration obtains the data itself. It concludes with calculated examples and one point that remains to be verified on a case-by-case basis.

Read also: Fees, taxes, and duties for the transfer of property ownership rights, for the cost of notarization and registration, which is a separate matter from the tax.

What is included in this tax and what remains outside of it.

The law treats three types of income together, because in all three the money or property is received without an exchange. Gifts, that is, movable property, immovable property, or money received without compensation. Inheritance, that is, what passes to heirs upon death, after deducting the estate's liabilities. And winnings from gambling.

Who is affected. Residents in Albania are taxed on their wealth wherever it is located, whether inside or outside the country. Non-residents They apply only to assets located in Albania and to gambling conducted here.

What's excluded. This tax has nothing to do with notary fees, the property transfer tax, or cadastral registration costs. Those are separate costs that are paid even when the tax comes out to zero.

Who is exempt from the inheritance and gift tax?

The path from wealth to obligation passes through two questions. The first looks at the family connection; the second looks at value.

Excluded family circle

The law does not itself set out the list of persons. It refers to the legal heirs of the first and second orders under Articles 361 to 363 of the Civil Code, and separately includes the brother-and-sister relationship.

This means that the real question is not how close the person is to you emotionally, but in which order the Civil Code places them. Therefore, when the gift goes beyond the close circle of parent, child, spouse, brother, and sister, the order is confirmed with the notary before the deed is signed, not after it has been signed.

There is also a third, narrower exception. The transfer of ownership to legal heirs, by gift or by renunciation, when the property derives from compulsory co-ownership acquired under Law No. 7501 of July 19, 1991, “On Land.”.

Two different thresholds, depending on the type of asset.

Outside the family circle, the exemption does not apply immediately. It is valid up to 5,000,000 lek for real estate and up to 1,000,000 lek for movable property, and is measured per taxpayer.

A point that is verified from time to time. The text of the article provides the “up to” exemption for these amounts, but does not explicitly state whether, once the threshold is exceeded, the 15% tax is calculated on the entire amount or only on the excess above the threshold. The difference is significant, so in a specific case this must be confirmed with the tax administration or a notary before filing, and it should not be assumed.

How is wealth evaluated?

The tax base is not the amount stated in the deed when it is lower than the actual value. Property is assessed at either its nominal value or its market value, and whichever is higher is used. The assessment is made at the time of the gift.

For a residence, the value may be determined by licensed experts or by applying the laws in force for real estate appraisal. For items such as a painting, a vintage vehicle, a gemstone ring, or an antique set, the value is determined by licensed experts in the field.

The valuation rules that the law applies to capital gains apply here as well. So a value written down below market price doesn't reduce the tax; it merely shifts the issue to audit.

Read also: 2026 Property Reassessment: Deadlines, Forms, and Calculation, which specifically touches on the value against which these obligations are measured.

Gains from gambling

These are treated differently from gifts. They are taxed at 15% and are taxed. masculine, Therefore, they are not grouped with other income and do not benefit from any threshold.

The rate is applied to profit, without deducting the cost of the ticket, losing bets, or any other expenses. That's why a regular player's calculation never matches his own, because he thinks about the season's outcome, while the law looks at profit.

They cover capital gains realized in Albania and, for residents, those realized abroad as well.

Read also: Tax calendar, deadlines of the year, for the statement period and for others that fall within the same period.

How is it declared and what does the administration see?

All three types are declared by the beneficiary themselves, in Individual annual income statement, until March 31 of the following year. Who is required to submit that statement is explained in Terms and Conditions page.

What often goes unknown is that the administration doesn't wait for the statement to learn what happened. The guidance provides for obtaining data from third parties, and the list is long.

• Notaries deposit with the General Directorate of Taxes the data of inheritance and gift deeds, including the beneficiaries and values.
• Banks provide data on incoming and outgoing transfers that indicate gifts, inheritances, or gains.
• The Directorate for the Prevention of Money Laundering submits reports in accordance with anti-money laundering regulations.
• The Central Bank provides data on cross-border transfers.
• The land registry records property transfers that do not appear to be commercial sales.
• The automatic exchange of information provides financial accounts held abroad.
• Bookmakers report their profits through withholding tax statements.

So non-declaration is not a choice between being visible and being invisible. The notarial act and the bank transfer are already visible.

Three calculated examples

First example: a gift within the family. A parent gifts a child an apartment valued at 12,000,000 lekë. The relationship falls within the exempt category, so the tax is zero regardless of the value. Only the notary and registration fees remain payable.

Second example: a gift outside the family below the threshold. A person gifts a friend a vehicle with a market value of 800,000 lek. The asset is movable and does not exceed the 1,000,000 lek threshold, so the tax is zero.

The third example: a gambling win. A win of 2,000,000 lek is taxed at 15%, so 300,000 lek, and the person keeps 1,700,000 lek. The cost of tickets lost during the year is not deductible.

Frequently asked questions

Is tax paid when a parent gives the house to the child?

No. Gifts and inheritances among first- and second-order legal heirs are exempt, with no value limit. Only notary and registration fees remain.

Does a brother or sister count as an excluded person?

Yes. The law explicitly includes the brother-and-sister relationship, in addition to the first and second orders of legal heirs.

What is the threshold for expulsion from the family?

Up to 5,000,000 lek for real estate and up to 1,000,000 lek for personal property, per taxpayer. Above these amounts, a 15% tax liability arises.

What happens if the book value is lower than the market value?

The higher of the nominal value and the market value is taken. A value written down below market value does not reduce the tax base.

Is the cost of tickets deducted from gambling profits?

No. Section 15% applies without any cost deductions, and gains are taxed separately, without being combined with other income.

Is an inheritance received from outside Albania taxed?

For a resident of Albania, yes, because the law extends its application to property located inside or outside the country. For a non-resident, only property located in Albania.

Legal basis

• Scope of application, definitions and standards, Law No. 29/2023 “On Income Tax,” Article 60.
• Family exemptions and the two thresholds, Law No. 29/2023, Article 60, paragraph 7.
• Assessment at nominal value or market value, Law No. 29/2023, Article 60, paragraph 6.
• Rate 15% without cost deductions, Instruction No. 26, dated September 8, 2023, point 60.
• First and second order of legal heirs, Civil Code, Articles 361 to 363.
• Compulsory co-ownership, Law No. 7501 of July 19, 1991, “On Land,” as amended.
• Individual annual declaration and the March 31 deadline, Law No. 29/2023, Article 67.