The best option for legal tax minimization for rental apartment owners, 2026

Question

An individual owns several apartments and wants to pay as little property and rental income taxes as possible, in a completely legal manner.

Which form of registration is the most acceptable and efficient for tax purposes?

Answer

The optimal choice depends on the level of annual rental income, the type of rental (long-term or short-term), the possibility of deducting real expenses, and the prospects for increasing activity.

An individual who owns several apartments and wants to completely legally minimize taxes on rental income (as well as property taxes, where there is little room for maneuver) should carefully evaluate tax registration options.

The best choice depends primarily on the level of annual rental income, its type (long-term or short-term like Airbnb), the possibility of deducting real expenses, and the prospects for increasing activity.

If you operate as an individual without a business registration (without a NIPT), rental income is treated as follows:

for long-term rentals, the tax is 15% on the net (after deducting documented expenses, if any), while

for short-term rentals, 15% on the gross without full expense deductions is usually applied (declared through DIVA).

Property tax remains unchanged in both versions above (0.05–0.2% on the cadastral value). This form is administratively simple, but brings a higher tax burden, especially for short-term rentals, where real expenses cannot be deducted.

The most efficient option for most cases with average income is to register as a small business (as an individual entrepreneur or a small legal entity with a turnover of up to 14 million lek per year).

According to the rules in force for 2026 (and until 2029), the profit tax is 0% for turnover up to 14 million lek (after deducting real expenses such as maintenance, depreciation, property tax, service bills, etc.).

For turnover up to 8 million lek, the simplified regime with minimal accounting applies, while from 8–14 million lek it switches to the standard regime (more complete accounting), but the rate remains 0%.

This facility completely avoids the 15% on gross for short-term rentals and allows full deductions of expenses, significantly reducing the effective tax. The property tax remains the same, but as a business it can be deducted as an expense.

If the income is expected to exceed 14 million lek per year, registration as a legal entity (e.g. LLC) becomes more appropriate. Even in this option, the profit tax is 0% up to 14 million lek and 15% on the net for the remainder. This structure offers better legal protection for assets and is more professional for high turnover volumes, but has higher registration and accounting costs.

In conclusion, the property tax does not change according to the form of registration, but only as a business can it be used as an expense deduction.

Under current conditions, Albanian law clearly favors small business, especially for rental income.

If the rental income is up to 14 million lek per year (realistic for most owners with several apartments), registering as a small business (initially as an individual entrepreneur) is the most efficient solution for zero tax on net profit, with full expense deductions. Correct tax planning is completely legal and recommended and everyone should consult a tax expert for the specific situation, as personal details make the difference!