Foreign Investment in Andorra’s Real Estate Market in 2024
New Regulations for Foreign Investment in Andorra:
In 2024, the Government of Andorra approved a new tax on foreign investment in real estate, aiming to regulate property acquisitions by non-resident investors and promote long-term rentals.
Who is affected by this tax?
This tax applies to the following groups:
○ Non-resident individuals in Andorra.
○ Foreign legal entities.
○ Individuals with less than 3 years of residency in Andorra.
○ Andorran companies with more than 50% foreign ownership.
○ Andorran companies with between 5% and 50% foreign ownership in share capital or voting rights.
With these measures, the government aims to prevent real estate speculation and encourage investors to establish stronger ties with the country.
Tax brackets based on the type of investment:
The tax on foreign investment in real estate is calculated progressively, ranging from 3% to 10%, depending on the type and number of properties acquired:
● 3%: for the purchase of a single-family home, apartment, studio, or commercial space up to 250m² (includes up to 2 storage units and 2 parking spaces).
● 5%: from the second to the fifth property, or for the acquisition of up to 10 parking spaces.
● 8%: from the sixth to the ninth property, or for the acquisition of up to 18 parking spaces.
● 10%: from the tenth property onward, or for investments in large-scale real estate and urban development projects.
Incentives to Promote Renting:
To encourage long-term rentals and increase the supply of available housing in Andorra, a 90% tax reduction has been implemented in the following cases:
● If the acquired property is used as a primary residence for rental purposes for a minimum of 10 years.
● If the real estate investment is aimed at developing long-term rental housing.
Objectives of this new regulation:
● Control foreign real estate speculation.
● Increase the supply of long-term rental properties.
● Generate additional revenue without affecting Andorran residents.
With these measures, Andorra aims to strike a balance between attracting high-quality foreign investment and protecting its real estate market, ensuring fair access to housing for residents and committed new investors in the country.
