Low living costs, affordable rents and liberal residency rules are turning Albania into an increasingly attractive destination for foreign retirees, particularly from the United States and Italy, according to real estate agents, government data and expatriates living in the country.
Rising housing and healthcare costs in the United States and parts of Western Europe have prompted a growing number of pensioners to look abroad for retirement, with Albania’s coastal cities of Vlora and Saranda among the main beneficiaries of the trend.
Foreign retirees can stay in Albania for up to one year without a visa or residence permit, a policy introduced in 2022 for U.S. citizens and later extended to other nationalities under specific conditions. The measure has helped fuel longer-term stays, particularly among pensioners testing life outside their home countries.
“I wouldn’t be able to survive on my pension in the United States,” said Lisa Spence, a 62-year-old retiree from Alabama who has been living in Vlora since October. Spence said she chose Albania for its low cost of living and safety after researching countries listed as friendly destinations by the U.S. State Department.
Spence, who receives a monthly pension of about $2,200, rents a two-bedroom apartment with a sea-view balcony along Vlora’s Lungomare for between $400 and $500 a month. A comparable property in the United States, she said, would cost at least three times more.
“Life here is calmer. You can enjoy simple things – coffee, walking, fresh food. People are welcoming, the climate is good, and healthcare has been easy to access so far,” she said.
Rising demand in coastal cities
Real estate agents say demand from foreign retirees has increased notably since 2025, with Americans joining Italians as a growing presence in Albania’s coastal rental market.
“There has been a clear rise in demand from American pensioners in Vlora over the past year, and the trend has continued into early 2026,” said Viola Shehaj-Malaj, a local real estate agent. She said most foreign retirees initially stay between one and two years, often using the visa-free period to assess whether to settle long term.
According to Albania’s Institute of Statistics (INSTAT), the number of foreign residents aged over 60 rose to 3,007 in 2024, an increase of 16% from the previous year. Seniors now account for about 17% of all foreigners holding residence permits in the country.
Europeans make up roughly two-thirds of foreign residents in Albania, followed by Asian nationals at 21%, while Americans account for around 7%, official data show.
Residency rules and tax considerations
Under current regulations, U.S. citizens may enter and stay in Albania for up to one year without a residence permit, provided they leave the country for at least 90 days before re-entering for another visa-free period. Albania also offers five-year residence permits to U.S., EU and Kosovo citizens who meet general legal criteria.
Foreign pensioners may apply for residence permits if they earn more than 1.2 million lek ($12,000) annually from pensions abroad and meet requirements including proof of accommodation, health insurance and a clean criminal record.
Taxation remains a key consideration. While some retirees assume foreign pensions are untaxed in Albania, experts warn that a 15% withholding tax applies unless a double taxation treaty exists between Albania and the pensioner’s home country.
“Albania does not automatically exempt foreign pensions from taxation,” said fiscal expert Julian Saraçi. “However, double taxation agreements with countries such as Italy and Germany may allow pensions to be taxed only in the source country or the country of residence, depending on the agreement.”
Italian retirees lead the way
Italian pensioners remain the largest group of foreign retirees in Albania, drawn by lower living costs and favourable tax treatment. Italian media estimate that the number of Italian retirees living in Albania rose to about 3,000 by early 2025, up from just 300 in 2021.
In Italy, a gross pension of 1,500 euros may net around 1,150 euros after taxes, while the same amount transferred to Albania can remain largely intact, depending on tax arrangements, according to retirees cited in Italian press reports.
Future growth expected
International real estate firm Colliers International Albania expects interest from U.S. retirees to grow further if Albania invests in healthcare infrastructure, international promotion and clearer fiscal incentives.
Data from GetGoldenVisa’s “Great American Exodus 2025” report estimate that between 450,000 and 760,000 Americans have retired abroad, with nearly one-third choosing Europe.
“Albania is increasingly being mentioned alongside countries like Portugal as a retirement destination,” said Stela Dhami of Colliers International Albania. “Low living costs and flexible residency rules are key advantages.”
Government data show that most residence permits in Albania are still issued for employment and family reunification, but the steady rise in older foreign residents suggests retirement migration is becoming a growing niche in the country’s evolving tourism and residency landscape.