We recommend that all of our clients are represented by an independent lawyer who can advise you fully on your purchase of your property in Andorra. Our buying guide also includes information on tax and residency in Andorra for private individuals and corporate entities.
We hope that you find this buying guide useful please contact us by email or call one of our Sales agents on (+34) 933 562 989 if you require further information.
Buying a property in Andorra
Under the new Law for Foreign Investments that has come into force it is possible now for all Andorra residents to purchase property without any limitations. Non residents can buy without any limitation as well, but they still have to apply for an authorization from the Andorra government.
Commercial property can only be purchased by foreigners if it is used for their own commercial activity.
A 4% Property Purchase Tax of the agreed purchase price between seller and buyer has to be paid to the Andorra Government whe purchasing a property.
Any non-Andorran citizen has to apply for a buying permit at the Andorra Government by means of an application form called ‘Autoritzacio d’inversio estrangera en immobles’. In this form one has to fill in who is the buyer, the property details, the purchase price and the form of payment. Obtaining the authorisation can normally take two weeks or less.
At the moment of signing the Public Title Deed in front of the notary the tax has to be made payable to the Government by means of a bankers cheque from an Andorran banking entity.
By law the seller has to hand over a ‘Certificat d’habitabilitat’ to the purchaser i.e. a certificate from a locally registered architect stating that the property meets all legal requirements to live in.
When selling a property a Capital Gains Tax rate is applied according to the following scale:
- 15% if you sell your property within 1 year;
- 13% within 2 years;
- 10% within 3 years
- and after that it decreases by 1% each year.
The inflation from the moment of buying until the moment of selling will be taken into account and discounted from Capital Gains.
For those who have been residents for at least five years and have owned a property for at least four years the regulations are different.
For properties with a purchase price between 120.000 and 300.000 euros the fees are approx. 600 euros + 0.1% of the declared selling price.
For properties with a purchase price between 300.000 and 600.000 euros the fees are approx 1.000 euros + 0.1% of the declared selling price.
For properties with a purchase price over 600.000 euros the fees are approx 1.300 euros and 0.1% of the declared selling price.
The purchaser pays notary fees and eventual extra charges for e.g. Powers of Attorney or Mortgage Deeds.
Whilst a property may be reserved verbally, the first commitment is made when the buyer places a 10% deposit with the selling agents: this is nonreturnable if the buyer subsequently withdraws from the transaction on unreasonable grounds. At that time a purchase agreement can be signed between buyer and seller. More normally a receipt for the deposit will be given and after a delay of about six weeks a purchase contract will be signed in front of a notary public.
The notary is a Government appointed official who acts impartially to safeguard the interests of both parties. At the time of signing, payment of the balance of the purchase price is made and the title deed or escritura is issued. Prior to this, Government approval to buy will have been sought by the selling agents who will have presented a solicitud (request for the approval of purchase) for the buyer. Completion normally takes some four weeks to arrange.
There are five Andorran banking companies. Banking is Swiss style and numbered accounts are available. Complete confidentiality is observed. The total lack of exchange control in Andorra permits banking in any currency although the euro is used as a base for making an exchange. The rates are quoted daily, based on Pesetas, and aligned to Euro-currency rates at the Swiss Exchange in Zurich.
To open an account takes about 20-30 minutes. You will need your passport. A deposit of around €100 is all that is necessary. You will receive your passbook about a week later. They are no restrictions on remitting funds to and from Andorra in any currency but strict observance of money laundering regulations are imposed by the Andorran banks.
Residency and tax in Andorra
At Lucas Fox Andorra we can assist all of our clients to obtain tax free passive residency in Andorra. This includes the preparation of all documents and their presentation.
For clients who decide to purchase one of our listed properties in Andorra for a value of €400.000 (four hundred thousand euros) we will provide this service absolutely free of charge.
If you are interested in becoming a passive resident in a low tax environment within Europe, Andorra is the right place to be. As of the start of 2012 prices of real estate for sale in Andorra have come down to the lowest levels since Andorran passive residency was introduced.
Join the list of Lucas Fox Andorra’s satisfied international customers who have made their passive residency application using our specialised and personal service.
For any information about Andorra, whether this is about buying, selling, taxes, residency, or any other Andorra related legal issues, please contact us without any commitment.
Lucas Fox Andorra can assist you in English, Español, Deutsch, Francais, Nederlands, русский.
The main requirements to apply for Passive Residency in Andorra are:
- Be over 18 years old
- Provide a certificate of funds available in your account (as at 01/01/2011) of €33,474,20 per annum for the head of the family and €11,158,08 for each dependant family member, for the period the passive residency is in force. This minimum amount required has to be certified by an Andorran bank.
- Show a non criminal record certificate (not older than three months)from the applicants home country and from the country of current residency.
- Produce documentation showing the existence of health insurance and a pension plan.
- Produce a document showing Civil Status.
- Own or rent a house or apartment in the Principality.
- Pay a non interest bearing deposit of €50,000 plus €10,000 for each dependant to the Government, which is refundable on departure.
- Invest €400.000 in Andorra. This can be done through buying a property, depositing funds with the Government (INAF), buying Andorra Government issued bonds or a combination of all of them (please note that the non-interest bearing deposit to the Government (INAF) is included in the €400.000). The applicant has 7 months from the date of residency approval to prove that a minimum of €400.000 has been invested.
- No income tax
- No taxation on gifts
- No inheritance tax
- No capital transfer taxes
A 4% Property Purchase Tax of the agreed price between seller and buyer has to be paid to the Andorra Government when purchasing a property. For further information on buying property in Andorra, please contact us.