Why invest in Andorra’s real estate market?

At Sterling, we’ve seen how the Andorran real estate market is one of the most attractive options for international investors. Andorra offers favorable taxation, a safe environment, and a growing demand for property. But what factors make 2025 a key year to invest?

1. Tax advantages and legal security

Andorra stands out for its competitive taxation and security for foreign investors:
● Income and corporate tax at 10% (one of the lowest in Europe).
● Zero taxes on wealth, inheritance, and donations.
● Stable and transparent legal framework, with guaranteed legal security.

How does personal income tax (IRPF) affect property purchases in Andorra?

One of the main benefits of investing in property in Andorra is its low personal income tax (IRPF), especially compared to other European countries:
● Maximum rate of 10% on income.
● 5% for income between €24,000 and €40,000.
● IRPF exemption for annual income below €24,000.
This low taxation is particularly attractive for individuals looking to establish tax residency in Andorra and benefit from a significantly lighter tax burden than in Spain or France.

2. Sustained Growth of the Real Estate Market

The real estate sector in Andorra continues to grow steadily and consistently:
● Property demand has increased by 30% over the past five years.
● Shortage of supply in luxury and residential housing.
● Key areas like Encamp and Canillo have seen price increases of over 15% per year per square meter.

3. Most Profitable Types of Real Estate Investments

● Buy-to-let for tourism: high returns in areas near ski resorts and urban centers.
● Purchase for passive residency: ideal for international investors seeking tax advantages.
● Investment in new developments: the real estate development sector in Andorra continues to show sustained demand.
With favorable taxation, growing demand, and an expanding market, Andorra is a safe option for those seeking profitability and stability.