Andorra: Overview

RENTAL YIELDS

Yields are moderate in Andorra

Apartments in Central Andorra enjoy yields ranging from 5.7% - 6.4%, while similar properties in the suburbs have relatively higher yields, averaging at 6.3% - 7.7%.

Housing in Central Andorra can cost around €2,100 to €2,850 per sq. m.
Similar properties in the suburbs offer a cheaper alternative, with prices ranging from €1,880 to €2,560 per sq. m.

A property of 250 sq. m. in the suburbs might cost around €470,000, while a property measuring 400 sq. m. might cost €820,000.

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TAXES AND COSTS

Andorra's rental income tax is very low

Rental Income: Personal income is not taxed as such in Andorra. Rental income, however, is taxed at 3% by some Andorran parishes.

Capital Gains: There are no capital gains taxes in Andorra. There is, however, a property acquisition tax, which ranges from 1% to 2% of the acquisition price. Alternatively, at times the purchase acquisition tax is levied per square metre.

Inheritance: There is no inheritance tax in Andorra.

Residents: Being an Andorran resident for more that 20 years entitles you to the same property acquisition rights as a citizen.

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BUYING GUIDE

Total transaction costs are moderate in Andorra

Total roundtrip costs, i.e., the cost of buying and selling a property, range from 10% - 15%. The buyer pays 5%, while the remaining 5% - 10% is paid by the seller.

The real estate agent’s commission, around 5% - 10%, is the biggest part of the transaction cost. The agent’s commission is paid by the seller, but is invariably reflected in the property asking price.

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LANDLORD AND TENANT

Andorran tenant protection laws are...

No information yet.

If you can recommend a helpful property lawyer in Andorra, please mail: publisher@globalpropertyguide.com

ECONOMIC GROWTH

Tourism - backbone of the Andorran economy

A pocket-sized princedom, Andorra is squeezed between France and Spain in the Pyrennes. Though tiny, it contains some of the most dramatic scenery, with mountainous landscapes and meandering rivers.

Authority over the co-principality is shared between Spain and France. The French President and the Bishop of Urgell are its co-princes.

Andorra makes its living from being a tax haven and from ski tourism, nowadays far more important. This small country (pop 67,000) has a somewhat down-market reputation – it is low cost and there are tax-free drinks and cigarettes. Boozy Britons figure prominently among the tourists.

Tourism accounts for more than 80% of Andorran GDP. The principality attracted an estimated 11.6 million tourists in 2005. There were more winter-sports enthusiasts from the UK than the US, Canada and Switzerland combined.

The banking sector, with its partial “tax haven” status, also contributes substantially to the economy. In 2004, the economy grew by 4%, and per capita GNP stood at $24,000. Inflation was 3.4%.

Andorra is a member of the EU Customs Union. It is treated as an EU member for trade in manufactured goods (no tariffs), but as a non-EU member for agricultural products.

Andorra’s population is rapidly growing. Although Andorran citizens and native-born Andorrans are outnumbered by non-Andorran residents, the ‘native’ population keeps on rising.