Overview
Andorra experienced a housing boom in the 1990’s and 2000’s which came to an abrupt halt in 2007/2008 as the global markets crashed. Real estate Investment especially in the popular ski destinations slowed and average property prices fell. The luxury end of the market, however, has held steady.
Whilst Andorra is still classed as a tax haven, and is comparatively cheaper than destinations such as Monaco, it is proactively trying to attract wealth to the region. New rules on residency and incentives have been put in place to attract high income individuals such as professional athletes and business-people. This has made the top-end of Andorra’s housing market very competitive, whilst unfortunately limiting the market for middle and lower end purchases.
Andorra is still very popular as a ski destination, though the economic downturn has had a large effect on certain housing. Investment before the crisis in large scale chalet-apartment developments means that the supply of these properties is greater than demand. With confidence in the housing market being quite low, some chalet apartments are being sold at bargain prices.
Prices and the market
Floorspace for property in Andorra ranges from €2,500 to €15,000 per m2. For comparison with Monaco, a rivalling tax haven, floorspace costs between €30,000 and €60,000 per m2. In this respect, Andorra is becoming more and more attractive to expats.
Whilst at first glance, the country might look like a buyer’s market there are a few things to suggest otherwise. Property sales can be stalled and yearly residency requirements mean that many people are put off selling their property. The desirability of certain property types (especially chalets on large plots) makes them a very secure investment for the future, and so owners are keen to hold on to these properties.
Renting
Rental contracts are legally five years in length and are heavily in favour of tenants. Landlords cannot sell the property during the contract, nor evict tenants without substantial evidence of a breach of contract or maltreatment of the property. Deposits are typically two months rent (that will be refunded), as well as the first month’s rent in advance.
Approximate rental prices:
- 1 bedroom apartment - €350-500 per month
- 2 bedroom apartment - €500-800 per month
- 3 Bed/Duplex - €650-1,300 per month
- Chalet or terrace house - €1,500-4,000 per month
Conditions of purchase and restrictions
Unlimited property purchases used to be limited to those that have held residency status for at least twenty years. Recent amendments have changed this in order to free up the market.
Those wishing to gain Passive resident status must reside in Andorra for at least 183 days per calendar year. To receive tax status, they are now required to make a minimum investment of €400,000. This can be any mix of investment in property, government bonds, and Andorran company shares.
Restrictions exist on nonresident foreigners wishing to buy property in Andorra. Permission to purchase is required from the government, and non-resident individuals can only acquire up to 1,000 m2 or two title deeds for apartments.
Costs to buyers/sellers
| Property Acquisition Tax | 4%* | Paid by the buyer |
| Notary Fee | 0.5% - 1% | Paid by the buyer |
| Estate Agent's Fee | 5% - 10% | Paid by the seller |
| Habitability Certificate | 0.07% | Paid by the seller |
*This is the percentage of the value of the property
Rental tax and capital gains on property
- Income from property rentals is taxed for non-residents at a flat rate of 10%.
- Capital Gains is taxed at 15% on properties held up to a year, and falling by 1% per year to zero for properties owned for 15 years or more.
This information for this guide was provided by Tribune Properties.
