The bustling influx of tourists in Tirana has led to a significant rise in the demand for short-term rental apartments. This surge in tourism has consequently fueled an increase in property listings on platforms like Airbnb, where new apartment listings have seen an impressive 70% growth in 2024, bringing the total to 4,271 apartments available for rent. Despite this growth, the short-term rental market remains largely informal. To address this, the government mandated that property owners must obtain a tax identification number (NIPT) as an official accommodation structure.

Why is this relevant

The 70% increase in Airbnb listings in Tirana reflects a significant shift in the housing market, driven by a booming tourism industry. This surge not only impacts rental prices but also signals a potential shift in how properties are used and managed. With more properties entering the short-term rental market, long-term rental availability could decrease, potentially driving up prices for local residents. Additionally, this growth underscores the need for formal regulation to ensure fair taxation and maintain standards within the rental market. By mandating tax identification numbers (NIPTs) for property owners, the government aims to integrate this sector into the formal economy, allowing property owners to benefit from favorable tax policies and ensuring that the economic benefits of tourism are equitably distributed.

The rising demand for daily rental apartments has not only driven up the number of listings but also significantly affected their pricing. According to Airbnb, the number of new apartment listings in the capital has risen by 70%, bringing the total to 4,271 apartments available for rent in 2024. The annual income for an average property owner now stands at approximately $7,600.

Several factors contribute to the significant increase in Airbnb listings. Firstly, the exponential growth in tourism has created an urgent need for more accommodation options. Tourists seek comfortable and affordable alternatives to traditional hotels, making short-term rentals an attractive option. This demand has incentivized property owners to list their apartments on Airbnb, thereby capitalizing on the influx of visitors. Properties closer to the city center, which offer greater security and better amenities, are particularly sought after by foreign tourists. The quality of investment in the apartment’s interior also plays a crucial role in its appeal.

Despite this growth, the short-term rental market remains largely informal. To address this, the government mandated that, starting from November of the previous year, property owners must obtain a tax identification number (NIPT) as an official accommodation structure. This regulation aims to formalize the market, allowing property owners to benefit from the favorable tax policies applied to the tourism sector, which only incurs a 6% value-added tax (VAT) compared to the 20% applied to other sectors of the Albanian economy.

This move not only encourages compliance but also integrates short-term rentals into the broader economic framework, ensuring fair taxation and regulation. It can lead to improved standards of accommodation, as properties will be subject to regular inspections and regulations. This, in turn, enhances the overall experience for tourists, fostering a positive image of the destination.