TIRANA, June 17 – The tax administration has set reference prices on rents in an effort to curb abuses with self-declaration of rents affecting the withholding tax on rents which starting January 2015 has been raised by 5 percent to 15 percent.
In a government decision which has also been published in the Official Gazette, authorities have determined a formula calculating rental prices at 0.3 percent of the market sale price per m2.
In two examples, the government decision says the minimum rent for a 70m2 apartment in downtown Tirana whose estimated sale price is at 190,000 lek/m2 (€1,322) will be at around 40,000 lek (€278) of which 6,000 lek (€42) will be paid in withholding tax by the apartment owner.
In another example for a 70 m2 apartment outside Tirana, tax officials expect the rent to be at 17,000 lek (€118) based on a sale price of 81,000 lek/m2 (€564).
The decision envisages that the minimum rent for commercial areas in Tirana will be twice higher compared to the minimum rent for apartments.
House and rental prices have suffered a considerable decline during the past four years after the collapse of the remittances-fuelled construction boom in the pre-crisis years.
House prices have dropped by 20.6 percent compared to 2010 while rental prices are down by 16.2 percent, says the central bank in its monetary policy report for the first quarter of this year.
