Do I pay tax when I inherit property from family in Albania?
It depends: close family pays nothing, but others do. Under law no. 29/2023 "On Income Tax", inheritances and gifts are treated as income and taxed at 15% — except where exemptions apply. The belief that "inheritance within the family is never taxed" is only half true. Fully exempt are inheritances and gifts between legal heirs of the first and second order (children, parents, grandchildren, grandparents) and between siblings. For anyone else — including cousins — there is relief only up to 5,000,000 lek for immovable property and 1,000,000 lek for movable property; above those values the 15% applies. Watch the figures: 5,000,000 new lek is often heard as "50 million" old lek — the very same amount. So the real question is not "is there tax", but "how closely related are you to the person leaving you the property".
📋 The rules
- Law no. 29/2023 treats inheritances and gifts as income and taxes them at 15%, subject to the exemptions set in the law.
- Fully exempt are inheritances and gifts between legal heirs of the first and second order and between siblings.
- For people outside that circle, there is relief up to 5,000,000 lek for immovable property per taxpayer.
- For movable property the exemption threshold is 1,000,000 lek per taxpayer; above it, 15% is due.
- First cousins are not exempt as close family: above the value threshold, inherited or gifted property is taxed.
🔓 Exceptions
- Transfer of ownership to legal heirs through gift or waiver, when it stems from mandatory co-ownership, has special treatment.
- Tax on the gain from selling property is a wholly separate obligation from inheritance and gift tax and should not be confused with it.
- Thresholds and conditions apply per taxpayer and are calculated under the specific implementing act; complex cases should be checked with the tax authority.
⚠️ Penalties & fines
The most common consequence is not an instant fine but a property transfer that stalls. To register the property in your name, the cadastre requires that tax obligations be settled; without proof of payment the deed stays open, however signed it is. If you lean on the myth "we're family, nothing is due" and it turns out you are a cousin or a relative outside the first and second order, you can face 15% tax on the value above 5,000,000 lek, plus late interest and administrative measures for late filing. Another quiet risk: deliberately understating the property in the deed to fall under the threshold can be reassessed by the administration against the reference price, bringing extra liability. And keep the currency trap in mind: when you hear "five million", clarify whether it is new lek (the real threshold) or old lek, because the difference is tenfold. Before you sign the deed, calculate the liability with the tax authority.
📎 Official sources
- QBZ · Law no. 29/2023 "On Income Tax" →
- Tax Administration · income tax →
- State Cadastre Agency · property registration →
❓ Frequently asked
Do I pay tax when I inherit my parents' house?
No. Inheritance between first-order heirs, such as children from parents, is fully exempt from tax under law 29/2023. The same applies to the second order and between siblings, so close family carries no charge here.
Are cousins exempt as family?
No, and this is the most common mistake. Cousins do not fall within the first or second order of heirs, so for them relief runs only up to 5,000,000 lek for property; above that value the 15% tax applies.
What is the threshold for movable property?
For movable property, such as money, vehicles or valuables, the exemption threshold is 1,000,000 lek per taxpayer. Above that amount, the excess is taxed at the 15% income rate under law 29/2023.
Five million lek threshold — new or old lek?
It is new lek, roughly 50 million old lek in everyday speech. The mix-up between new and old lek is a factor of ten, so always clarify the unit before you work out the liability or agree on any figure.
What happens if I do not declare it?
The transfer of ownership is not registered until obligations are settled, so the property stays effectively frozen in the old name. On top of that, you risk late interest and administrative measures for late or inaccurate filing.
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