Andorra (AD)
Andorra is a tiny parliamentary co-principality nestled in the Pyrenees mountains between France and Spain, governed jointly by the French President and the Bishop of Urgell.
Buying Property in Andorra
The full buying process, transaction costs, mortgage, and legal requirements.
Andorra's property market is unique: a tiny country of 468 km² surrounded by mountains with strictly limited buildable land. This scarcity drives prices significantly higher than comparable rural Spanish or French regions. Andorra la Vella and Escaldes-Engordany are the most expensive areas (€3,500–7,000/m²). Properties near Grandvalira (Canillo, El Tarter, Soldeu) attract strong ski-season demand (€4,000–8,000/m²). CRITICAL 2025–2026 CHANGES: Non-resident foreigners and residents with fewer than 3 years of effective residence in the past 10 years are now subject to a mandatory Foreign Real Estate Investment Tax (Impost sobre la Inversió Estrangera Immobiliària — IIEI) and must obtain prior foreign investment authorisation from the Andorran Ministry responsible for foreign investment before any notarial purchase. The moratorium on non-resident purchases imposed in September 2023 was lifted by Act 5/2025 (March 2026), replaced by this new tax and authorisation framework. Purchases are also capped: non-residents may acquire a maximum of one single-family home or two apartments (with up to 3 parking spaces and 3 storage rooms per unit).
Rent vs. Buy
The rent vs buy calculus in Andorra is complex. Rents are high (€800–1,800/month for a 2-bedroom apartment in Andorra la Vella), making buying financially appealing for long-term residents. However, the property market is illiquid — selling can take 6–18 months in non-ski-season periods. Non-resident buyers must also factor in the IIEI tax (6% on first property, 10% on additional properties), which significantly raises the cost of entry. For long-established Andorran residents (3+ years effective residence in last 10 years) the IIEI does not apply, making purchase considerably more cost-effective. Property values have risen 15–25% since 2020 driven by demand from French and Spanish nationals seeking the Andorran tax regime, though the new restrictions have cooled the non-resident market.
Buying Process — Step by Step
Verify your foreign investment status and IIEI applicability
2–6 weeks (authorisation processing time)Determine whether you are classified as a "foreign real estate investor" under Law 5/2025 and Law 2/2026 (Omnibus 2). If you are: (a) a non-resident, (b) a resident who cannot prove 3+ years of effective residence in Andorra within the past 10 years, you are subject to IIEI and must obtain prior foreign investment authorisation from the Ministry of Economy and Finance. Without authorisation, the notary cannot proceed. Engage an Andorran lawyer (advocat) at this stage — this step is non-optional for non-residents.
Define search criteria and engage an estate agent (Immobiliari)
2–8 weeksDecide on location (parish), property type (apartment vs chalet), budget, and purpose (primary residence or rental investment). Research market values via local estate agents (immobiliàries). Work with a licensed Andorran estate agent — confirm their licence with the Comú of the relevant parish. Agent fees are typically paid by the seller (3–5% of sale price) so there is no direct buyer cost.
Make an offer and sign a Promesa de Compravenda
1–2 weeks after offerOnce you agree on a price, sign a Promesa de Compravenda (preliminary sale agreement) and pay a reservation deposit (typically 10% of the purchase price). This is legally binding — if the buyer withdraws, they lose the deposit; if the seller withdraws, they return double the deposit.
Legal due diligence
2–4 weeksYour notari (notary) or advocat (lawyer) verifies: clean title (free of encumbrances), outstanding mortgages, building permits, cadastral records, any community fees owed, and ITP tax status. Cross-reference with the Registre de Propietats (land registry). Verify that any prior IIEI foreign investment authorisation has been issued and is valid.
Arrange financing (if applicable)
3–6 weeksAndorran banks (Crèdit Andorrà, MoraBanc, Andbank, Banc Sabadell d'Andorra) offer mortgages (hipoteques) to residents. Non-residents are offered LTV ratios of 60–70%, requiring a 30–40% down payment (some banks require 50%). Interest rates (2026): variable ~Euribor + 1–2% or fixed at 3.5–5.0% (10–25 year term). Proof of income and CASS (social security) contributions are required for residents.
Sign the Escriptura de Compravenda (deed of sale) before the Notari
1 day (appointment) + 2–4 weeks for registrationBoth parties sign before an Andorran notari. The notari must verify that any required IIEI foreign investment authorisation exists before proceeding. The deed is legally binding. The notari submits the transfer to the Registre de Propietats and processes ITP and IIEI tax payments.
Register in the Registre de Propietats and pay all taxes
2–4 weeks after deed signingThe notari registers the ownership transfer in the communal property register for the relevant parish. Pay all transaction costs at this stage: ITP (4%), IIEI (6% or 10% if applicable), notari fees, and any lawyer fees. You receive confirmation of registration.
Transaction Costs
| Cost Item | Amount | Notes |
|---|---|---|
| Impost de Transmissions Patrimonials (ITP) — property transfer tax | 4% of purchase price | Main transaction tax in Andorra, paid by the buyer at deed signing. Significantly lower than Spain (6–10%) or France (5–8%). Applies to all buyers regardless of residency status. |
| IIEI — Impost sobre la Inversió Estrangera Immobiliària (Foreign Real Estate Investment Tax) | 6% of real value for first property; 10% for additional properties | CRITICAL: Applies to non-residents and residents with fewer than 3 years effective residence in the past 10 years. Introduced under Law 3/2024 and updated by Law 2/2026 (Omnibus 2, in force February 2026). The rate doubled from 3% to 6% under Omnibus 2. Andorran residents with 3+ years confirmed residence are exempt. This tax is on top of the 4% ITP — non-resident buyers effectively pay 10% total in purchase taxes on their first property. |
| Foreign investment authorisation fee | €100–300 (government fee) | Non-residents must apply to the Ministry responsible for foreign investment before the notarial deed. This is a regulatory step, not just a tax — without it the notary will refuse to proceed. Processing takes 2–6 weeks. |
| Notari fees | 0.5–1% of property value (minimum ~€600) | Fixed fee scale regulated by the Notariat d'Andorra. Covers deed preparation, verification, and registration submission. Not negotiable. |
| Lawyer / advocat fee | €500–2,000 (recommended for expats and all non-residents) | Andorran advocat to manage the foreign investment authorisation process, review the Promesa and Escriptura, check title, and advise on IIEI applicability. Non-negotiable for non-residents given the regulatory complexity. |
| Estate agent commission | 3–5% (typically paid by seller) | Buyer usually pays no direct agent fees. Confirm arrangement in writing before proceeding. |
| Mortgage costs (if applicable) | €500–1,500 (arrangement fee + notari mortgage deed) | Bank arrangement fees vary. Some banks charge 0.5–1% of loan value as arrangement fee plus a separate notarial fee for the mortgage deed. |
| Registre de Propietats registration fee (parish) | €100–500 | Parish-level property registration fee — paid by the notari on your behalf. |
| Annual property tax (Impost de Béns Immobles — IBI) | €200–1,200/year (ongoing) | Andorran equivalent of council tax. Charged annually by the Comú of the relevant parish. Based on assessed (cadastral) value of the property. |
The Notary — Mandatory for All Purchases
The Notari (Notary) plays a central and mandatory role in all Andorran property transactions. Every sale deed (Escriptura de Compravenda) must be signed before a licensed Andorran notari. The notari verifies identity of all parties, verifies that any required IIEI foreign investment authorisation exists, reads the deed aloud, ensures the terms are understood, witnesses the signature, processes ITP and IIEI tax payments, and submits the transfer for registration. Unlike some countries, the Andorran notari is a neutral public officer — they do not represent either party. Fees are regulated by the government. The Notariat d'Andorra has offices in Andorra la Vella. Without the foreign investment authorisation (where required), the notari must refuse to certify the deed.
Mortgage
Andorran banks offer mortgages (crèdit hipotecari) to residents and non-residents for Andorran property purchases. The market is small but competitive among Andorra's five main banks. Rates in 2026: variable rate ~Euribor + 1.0–2.0%; fixed rate ~3.5–5.0% (10–25 year term). Euribor has been declining from its 2023 peak — variable rate mortgages are becoming more competitive again. Note that for non-residents, the 6% IIEI + 4% ITP means total taxes at purchase are ~10% of property value — factor this into total financing needs.
20–30% for Andorran residents (3+ years). 30–50% for non-residents and newer residents — some banks require up to 50% for buyers without Andorran income. Non-resident LTV is typically capped at 60–70%.
Non-resident foreigners can obtain Andorran mortgages but face stricter LTV requirements (60–70%) and higher interest rate margins. Must demonstrate income source and creditworthiness through home country bank statements and tax returns. Passive resident mortgage applications are treated more favourably if the Andorran residency investment is evidenced. Note: as of Law 2/2026, the minimum investment for passive residency (residència passiva) increased from €600,000 to €1,000,000, with an alternative of €400,000 directed to the Housing Fund. The AFA bond (€50,000) has been converted to a non-refundable payment under Omnibus 2.
Land Registry
Andorra does not have a single national property registry — each of the seven parishes (comuns) maintains its own communal property register (Registre de Propietats). Title is recorded at the Comú of the parish where the property is located. The notari verifies title and registers the transfer with the relevant Comú. A property search (nota simple equivalent) verifies ownership, outstanding mortgages, charges, and easements. The Foreign Investment Register (Registre d'Inversions Estrangeres), administered by the Ministry of Economy and Finance, also records foreign property purchases — non-residents must register their acquisition.
Taxes
Key property taxes in Andorra: (1) ITP (Impost de Transmissions Patrimonials): 4% of purchase price — paid at completion by buyer. (2) IIEI (Impost sobre la Inversió Estrangera Immobiliària): 6% for non-residents/new residents buying their first Andorran property; 10% for additional properties — paid in addition to ITP. Confirmed and rates doubled under Law 2/2026 (Omnibus 2, February 2026). (3) IBI (Impost de Béns Immobles): annual parish property tax — €200–1,200/year depending on parish and property value. (4) Capital gains on property sale: taxable under IRPF at the standard maximum 10% rate — significantly lower than Spain (19–28%). No separate property CGT. (5) Rental income: taxable as IRPF — 0% on first €24,000, up to 10% above.
New Build vs. Existing Property
New build (obra nova) in Andorra is limited — strict planning regulations and scarce buildable land. New developments are premium-priced (€5,000–10,000/m² in prime locations). Some developments include skiing amenities (ski-in/ski-out in Pas de la Casa, El Tarter). Under Law 5/2025, foreign investment in real estate development is prohibited except for projects where at least 50% of units are dedicated to affordable long-term rental (10+ years minimum holding). Existing property (second-hand) is more common and more commonly transacted. Key checks for existing property: building age, last renovation, insulation quality (Andorran winters are cold), and community building fund (fons de reserva) health.
Selling Property
Selling Andorran property: notify your estate agent and engage a notari for the deed. Capital gains (difference between purchase price and sale price, adjusted for inflation and improvements) are taxable at your IRPF rate (max 10%). No notional gains tax. Estate agents typically charge the seller 3–5%. Allow 6–18 months to sell in less active seasons. Non-resident sellers must ensure compliance with IRNR (non-resident income tax) on capital gains if applicable.
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