Accountant for Real Estate Agencies and Developers

A real estate agency or property development company does not just need invoice recording. It needs an outsourced accountant who understands property market dynamics, transaction cycles and the fiscal specifics of the real estate sector.

Accounting for real estate agencies includes:

• •Commission invoicing — every brokerage commission must be invoiced through the fiscalization system, with accurate documentation of the underlying transaction.
• •VAT on real estate transactions — sales, purchases, rentals and brokerage each have different VAT treatment.
• •Monthly and annual tax declarations — profit tax, VAT, contributions and local property taxes.
• •Payroll for agents — calculating base salaries, commissions and social contributions for sales agents and staff.
• •Property portfolio tracking — valuation and recording of properties in inventory or as fixed assets.
• •Annual balance sheet and financial statements — closing the fiscal year with accurate valuation of real estate assets.

If you are opening a new real estate agency, start with LLC formation or sole proprietorship registration, depending on your business plan.

VAT in the real estate sector has specific and complex rules. Here are the key points:

Brokerage commissions: Commissions collected from brokering sales or rentals are taxed at 20% VAT. The commission invoice is issued to the paying party (usually the seller or the property owner).

Property sales: The first sale of new buildings by the developer has specific VAT treatment. Resale of used properties is generally exempt from VAT, but there are exceptions. Collaboration with construction companies requires careful fiscal coordination.

Property rentals: Rental of residential properties may be exempt from VAT, while rental of commercial properties is taxed at 20%. The distinction is critically important for accurate calculation.

Deductible VAT: The agency has the right to deduct VAT paid on operating expenses: office rent, marketing expenses, equipment, transport and professional services.

Electronic invoicing: Under fiscalization, every commission invoice must be issued electronically. This includes commission invoices, rental invoices and property management service invoices.

Common mistakes: - Not invoicing small or informal commissions. - Incorrect VAT treatment for residential vs. commercial rentals. - Late filing of the monthly VAT declaration. - Not including property management income.

The real estate sector encompasses several types of activities, each with different accounting treatment:

Brokerage: The agency acts as intermediary between seller and buyer. Revenue consists of commissions, usually a percentage of the transaction value. Invoicing is done for every collected commission.

Property development: The company buys land, builds and sells. Accounting tracks development costs by project — similar to construction companies — including land acquisition, construction costs, permits and sales.

Property management: The company manages properties on behalf of owners — collects rents, organizes maintenance, manages tenant relations. Revenue consists of management fees.

Direct rental: The company owns properties and rents them out. Revenue consists of monthly rents, expenses include maintenance, local taxes and insurance.

Real estate investment: Purchasing properties for resale at a profit. Accounting tracks purchase cost, renovation expenses and selling price.

Each type of activity has different tax obligations. Your accountant structures the bookkeeping according to the types of activity you carry out.

The annual balance sheet for real estate companies has unique elements:

Property portfolio: Accurate valuation of every property in the portfolio — as inventory or as fixed assets — is the foundation of the balance sheet. Changes in market value must be reflected according to accounting standards.

Projects under development: Properties still in the development or construction phase are recorded with accumulated costs up to the balance sheet closing date.

Uncollected revenue: Invoiced but uncollected rents are recorded as accounts receivable. The risk of non-collection is also assessed.

Liabilities to owners: For companies that manage properties on behalf of others, collected but untransferred funds are recorded as liabilities.

Financial statements include: - Balance sheet — property portfolio, accounts receivable, liabilities and equity. - Income statement — commissions, rents, property sales, operating expenses, profit/loss. - Cash flow statement — cash flow from operating, investing and financing activities. - Explanatory notes — valuation policies, details of key properties.

Deadline: The annual balance sheet is submitted to the National Business Center (QKB) by March 31. The profit tax declaration is submitted to the tax authorities by the same deadline.

Your accountant prepares these documents with special care — just as for trade businesses, the tourism sector or manufacturing.

Based on our experience with real estate agencies in Tirana, Durres and throughout Albania, these are the most frequent mistakes:

1. Not invoicing commissions Some agencies do not invoice small commissions or receive payments without documentation. Every commission must be invoiced through the fiscalization system.

2. Incorrect VAT treatment Confusing VAT treatment for residential vs. commercial rentals, or for new vs. used property sales.

3. Not tracking expenses by property Maintenance, insurance and tax expenses must be attributed to the specific property for accurate profitability calculations.

4. Late tax declarations Real estate transactions often have long cycles — but tax obligations have strict monthly deadlines.

5. Incorrect property classification Properties for resale (inventory) vs. properties for rental (fixed assets) have entirely different accounting treatment.

6. Not registering agents Sales agents must be registered as employees or as contractors — registration must match the actual nature of the relationship.

7. Not paying local taxes Building and land taxes are separate obligations that are often forgotten — but they incur fines if unpaid.

An accountant experienced in the real estate sector prevents these mistakes. If you are just starting out, make sure LLC formation and licenses are in order.

Based on our work with real estate agencies and property developers, the most requested services are:

• •Full monthly bookkeeping — transaction recording, commission tracking, bank reconciliations.
• •Monthly tax declarations — VAT, profit tax, social contributions.
• •Payroll and employee registration — base salaries, agent commissions and contributions.
• •Annual balance sheet closing — financial statements with property portfolio valuation.
• •Tax advisory — fiscal optimization for real estate transactions.
• •Fiscalization — system configuration for commission and rental invoicing.
• •Business formation — QKB registration, NIPT registration, LLC formation.
• •Profitability reports — financial analysis by property or project.

Every real estate agency has specific needs. We offer similar services for trade businesses, restaurants, IT companies and construction companies. Our accountant offers a free initial consultation to understand your needs.