Short answer
The property tax is 0.051 TP3T of the taxable value for residential buildings and 0.21 TP3T for buildings used for economic activities. The rate is set by Law No. 9632/2006, Article 22/2, the same for the entire country. The municipality administers and collects the tax but does not change the rate.
Verified on from Andi Haxhillari, Certified Accountant. Compared with Law No. 9632/2006, as amended through Law No. 82/2025, Articles 5, 21, 22, 22/1 and 22/2. On November 14, 2026, it was clarified that the tax rate is set by law, not by the municipal council.
The property tax is not calculated on the price you paid for the property or on its market sale value, but on the taxable value derived according to the methodology of the Council of Ministers' Decision. No. 132, dated March 7, 2018. The rate applied to this value depends on the building's use—residential or commercial—and does not vary from municipality to municipality. What changes from one property to another is the taxable value itself.
This page shows who pays the tax, how the calculation base is formed, why residential buildings and business buildings are not treated the same, and when the obligation is payable. At the end, it clearly distinguishes what is in effect from what is only circulating as a proposal, because the second—regarding revaluation and the shift to market value—is often read as the first.
Read also: What taxes are paid to the municipality?.
The tax is owed by the property holder, that is, the owner, and in certain cases by the holder of a real right or by the user. The obligation is tied to the property, so a change of owner within the year requires checking the status of the liability before signing the contract.
For leased properties, the obligation to the municipality remains with the owner. The contract with the tenant may provide that the tenant covers the cost, but that only regulates the relationship between the parties and does not shift the obligation to the municipality.
Who is the addressee of the obligation?
| Situation | Who pays the municipality? |
|---|---|
| Owner-occupied property | Owner |
| Property for rent | The owner, regardless of the contract |
| Property with a real right in another | Holder of the real right |
| Property sold within the year | The status of the pre-contractual obligation is checked. |
Attention. The exact rules for allocating the obligation between the seller and the buyer over the course of the year, as well as cases of tax exemption, are set out in Law No. 9632/2006 and in the decision of the municipal council.
The basis for calculation is the taxable value of the property. It is derived according to the methodology of Government Decree No. 132, dated March 7, 2018, which combines the building's surface area with reference prices by zone and with corrective coefficients. The result does not match the purchase price and does not correspond to the market sale value.
The tax rate is applied to the taxable amount. The formula is simple in logic: the taxable amount is multiplied by the rate, and the only practical difficulty lies in determining the taxable amount, not in the multiplication.
Attention. The tax rate is the same everywhere, according to Article 22/2 of Law No. 9632/2006. Area coefficients and reference prices per square meter are not published on this page, because the taxable value of each property is determined by the assessment according to the methodology of Government Decree No. 132/2018.
Example with hypothetical values and statutory rates. The taxable value of an apartment is calculated at 6,000,000 lekë and the applied rate is 0.05%. The annual tax is 3,000 lekë. For a business unit with a taxable value of 12,000,000 lekë and a rate of 0.2%, the annual tax is 24,000 lekë. The same rates apply in every municipality. For your property, only the taxable value changes, which is determined by the assessment according to Government Decree No. 132/2018.
Read also: New real estate tax 2026.
The building's destination determines the rate. Residential buildings are taxed at 0.051% of the taxable value, while buildings used for economic activities are taxed at 0.21%, that is, four times as much. The law ties the rate to the building's use rather than its area.
The practical consequence arises when the same property changes use. An apartment that becomes a service unit, or a residential floor that turns into an office, may be reclassified as a business portion of the building. Notifying the municipality of the change is the business's own responsibility and is not automatically handled by the activity registration.
Housing versus economic activity
| The issue | Residential building | Business building |
|---|---|---|
| Base of calculation | Taxable value according to Government Decree 132/2018 | Taxable value according to Government Decree 132/2018 |
| Tax rate | 0.05% of the value | 0.21 TP3T of the value |
| The way of gathering | Often through the utility bill | According to the municipality's announcement |
| Recognition as a deductible expense | Does not apply | According to the general expense rule |
For individuals, the property tax and local fees are collected in some municipalities via the water service bill, while in other municipalities they are paid at the counter or at a bank. For businesses, the obligation is paid according to the municipality's notice and within the deadlines set by the municipal ordinance.
The building tax is not filed on e-Filing and is not linked to the tax return. This is the most commonly confused distinction, because taxes and municipal fees are collected at the same counter.
Caution. The method of collection and payment deadlines vary from municipality to municipality. The only reliable checks are the municipal council's decision for the relevant year and the official notice you receive. The above description is a practice, not a uniform rule for the entire country.
Proposals to change the property tax base have been circulating for years and are often reported as approved. The breakdown below is intentional, because it determines what goes into business calculations.
IN FORCE, the methodology for taxable value under Government Decree No. 132, dated March 7, 2018; types of taxes according to Law No. 9632/2006, as amended; the rate of the tax on buildings under Article 22(2) of this law; the installments, deadlines, and payment reliefs as set by the municipal council's decision for the relevant year.
The shift of the property tax base from taxable value under the methodology to market value, as well as the property revaluation schemes associated with this shift. Until they are approved and take effect, they do not create any obligation and are not used for calculations.
The revaluation of real estate, when approved as a time-limited measure, is a blog topic because it has an expiration date and does not become part of the permanent system. This page links to the relevant article and does not repeat it.
Read also: 2026 reassessment, deadlines, forms, and calculation.
The taxable value is confused with the purchase price or the market value, and the tax calculation comes out incorrect.
It is believed that the tax rate is set by the municipality. In fact, it is set by law at 0.051 TP3T for residential property and 0.21 TP3T for economic activity, while the municipality determines the installments and payment deadlines.
The owner with a tenant assumes that the obligation to the municipality has been transferred to the tenant, because that's what the contract says.
The apartment has been converted into a service unit, and the change of destination has not been declared to the municipality.
The outstanding obligation is disclosed only at the time of sale, when verification is required.
The building tax is required for e-Filing, while its administration is handled by the municipality.
The proposed market value determinations are generally adopted as binding and included in the business budget.
0.051 TP3T of the taxable value for the residential building and 0.21 TP3T for the building used for economic activities, pursuant to Article 22/2 of Law No. 9632/2006. The rate is the same nationwide. What varies is the taxable value, which is determined according to the methodology of Government Decree No. 132/2018.
According to the methodology of Government Decree No. 132, dated March 7, 2018, which combines the area with reference prices by zone and with coefficients. It is neither the purchase contract price nor the market sale price.
The obligation to the municipality falls on the owner. The agreement with the tenant only regulates the relationship between the parties.
Yes, four times higher. The rate for buildings used for economic activities is 0.21 TP3T, compared to 0.051 TP3T for residential, while the calculation basis follows the same methodology.
The developer who does not complete construction within the permit's deadline pays 30% of the applicable rate on the entire building area. The obligation begins on the day the period specified in the building permit ends, in accordance with Article 22(3) and Article 22/2(c) of Law No. 9632/2006.
The transition to market value is treated as a measure under discussion. Until it is approved and takes effect, the taxable basis remains the value under the current methodology.
At the municipality, or via the utility bill in municipalities that have chosen this collection method. It is not declared in e-Filing.
When the property is used for the activity, the tax is treated under the general rule for deductible expenses, meaning it must be related to the activity and documented.
No. Failure to obtain the notice does not eliminate the obligation. Verification is done directly with the municipality, especially before selling the property.
Law No. 9632, dated October 30, 2006 “For the local tax system,” last amended by Law No. 82/2025, Articles 22 through 22/5 on the property tax, where Chapter III was repealed by Article 71 of Law No. 29/2023.
The Council of Ministers' Decision No. 132, dated March 7, 2018, the methodology for determining the taxable value of real estate
Joint Instruction No. 17, dated June 20, 2022, on the administration of local taxes
The municipal council's decision for the relevant year, which sets the installments, payment deadlines, and relief measures, and which is reviewed for each municipality separately.
Law No. 29/2023 “For the income tax,” as amended, section 48 on the general rule for deductible expenses.