Andorra: Overview

RENTAL YIELDS

Last Updated: Sep 03, 2008

Low yields for countryside apartments

Apartments along the country side of Andorra are very poor at an average of 2.52%. Much lower than 2006 Global Property Guide estimates of around 6.3-7.7%

Prices range from €160,400 to €700,000 for 40 to 160 sq.m. sized properties. There are no rental yields for countryside homes but prices per square metre start at €3,800.

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TAXES AND COSTS

Last Updated: Jul 12, 2006

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

Last Updated: Jul 12, 2006

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

Last Updated: Aug 30, 2006

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.