A veritable tax Eldorado, the Principality of Andorra attracts many foreign investors every year in search of tax optimization. However, its attractiveness has caused property prices to soar, prompting the government to take action. Here's the latest news on real estate investment in Andorra for non-residents.
Key figures for the Andorran real estate market
Since the country's total economic opening in 2012, allowing the arrival of foreign capital, Andorra's tax advantages attract investors from all over the world. As a result, property prices have soared by more than 30% since mid-2018! In 2022 alone, the government has authorized nearly 500 property purchase applications by non-residents.
Temporary freeze on investment authorizations
Faced with this overheating, the authorities decided in September 2023 to temporarily suspend property purchase permits for foreigners. This radical measure was taken as a matter of urgency to avert a housing crisis. But the freeze is worrying some investors.
"This suspension is a temporary measure to regulate a booming real estate market. Investors will be able to buy again within a few months."
- The team at And Capital, specialists in setting up a business in Andorra
Foreign investment tax on the way
To control speculation without discouraging investors, the government plans to introduce a progressive tax on property purchases by non-residents in early 2024:
- 3% for a first property
- 5% for a single-family home
- 8% over 5 units
- 10% from the 10th item upwards
This low-impact tax will finance housing for local residents. A win-win project for residents, tourists and investors, which should put an end to the freeze on permits.
And for optimize your tax situation despite this new parameter, theAnd Capital to help you plan your real estate investments in Andorra. Don't hesitate to Contact us to discuss your expatriation or relocation project. passive house in the principality!
