Albania’s short-term rental market has seen rapid growth in recent years, driven by surging tourism demand and the widespread use of platforms like Airbnb and Booking.com. In 2024, rental income reached €350 million, a 9.4% increase compared to the previous year, while recorded overnight stays in rental accommodations surpassed 1.28 million.
However, behind the impressive figures lies a structural challenge: up to 40% of property owners operate informally, avoiding tax declarations. In response, the Albanian government is implementing a stricter regulatory framework aimed at reducing tax evasion, promoting market fairness, and boosting public revenue.
New operating requirements for property owners
Starting in early 2025, every property owner wishing to rent out a home on a short-term basis must:
Obtain a specific operating license.
Register with tax authorities and declare rental income regularly.
Pay a 15% income tax, as applicable to individuals.
In 2024, Albanian tax authorities collected 5.3 billion lek (€53.6 million), up 10.3% year-on-year, thanks to the progressive rollout of these measures. Furthermore, Airbnb and Booking.com are now legally required to share user transaction data with local tax agencies. Albania has also signed tax cooperation agreements with Ireland and the Netherlands—where these platforms are headquartered—to facilitate cross-border data exchange.
Tougher penalties for non-compliant operators
Owners who rent without a license or fail to declare income face:
Heavy fines, potentially multiple times the avoided taxes.
Revocation of the right to operate legally.
For foreign owners, potential visa issues or even deportation.
Industry experts stress that operating legally is now both safer and more financially viable than risking severe penalties.
High returns — But not without risks
Despite increased oversight, Albania remains a promising market: in 2024, the country welcomed 11.7 million tourists, with daily rental rates ranging from €60 to €600. The ongoing improvement of tourism infrastructure further strengthens long-term prospects.
However, challenges remain. Oversupply in some areas, rising quality expectations, and shifting regulations create pressure for owners to professionalize operations. The government is also considering new regional quotas and additional levies to address housing affordability and infrastructure strain in popular areas.
A market maturing rapidly
Albania’s short-term rental sector is evolving from an informal opportunity to a regulated, high-yield market. For investors, the new rules signal a turning point—offering both clarity and challenge. Success will depend on compliance, quality offerings, and an understanding of the evolving legal landscape.
