Guide to Property Taxes in Andorra
| Tax Rate on Rental Income | |||
| Monthly Income | €1,500 | €6,000 | €12,000 |
| Tax Rate | 8% | 8% | 8% |
Nonresident individuals are generally subject to Andorra's Non-Resident Income Tax (Impost sobre la Renda dels No-Residents Fiscals, or IRNR) on income derived from Andorran sources, including income arising from real estate situated in Andorra.
Rental Income Tax
Rental income earned by a nonresident individual from real estate situated in Andorra is generally subject to Non-Resident Income Tax (IRNR) at a rate of 10%.
For income derived from the rental of Andorran real estate, the taxable base benefits from a standard reduction equal to 20% of the gross rental income. Consequently, the 10% tax is generally applied to 80% of gross rental income, resulting in an effective tax rate of approximately 8% of gross rental income.
| Tax Type | Rate |
| Non-Resident Income Tax (IRNR) | 10% |
Capital Gains
Capital gains derived by a nonresident individual from the disposal of real estate situated in Andorra are subject to Andorran taxation. Following reforms to the taxation of real-estate gains, the former separate Real Estate Capital Gains Tax, which applied declining rates depending on the property's holding period, has been integrated into the general income-tax system.
Accordingly, the former schedule of rates ranging from 15% for short holding periods and declining over time should no longer be used as the current tax treatment. Capital gains derived by a nonresident from Andorran real estate are now dealt with under the Non-Resident Income Tax (IRNR) framework, generally at a rate of 10% on the taxable gain, subject to the applicable rules for determining the taxable base, exemptions and other specific provisions.
| Tax Type | Rate |
| Capital Gains | 10% |
Corporate Taxation
Andorran resident companies are generally subject to Corporate Income Tax (Impost sobre Societats) at a standard rate of 10% on taxable profits. Income derived from renting real estate and taxable gains arising from property disposals are generally incorporated into the company's corporate income tax base. Qualifying business expenses may generally be deducted in determining taxable profit, subject to the applicable tax rules.
| Tax Type | Rate |
| Corporate Tax | 10% |
Property Buying Costs and Taxes in Andorra
| Transaction Costs | ||
| Who Pays? | ||
| Registration Fee | 10.00% | buyer |
| Notary Fee | 0.10% - 0.30% | buyer |
| Legal Fees | 1.00% - 2.00% | buyer |
| Real Estate Agent's Fee | 5.00% | seller |
| Costs paid by buyer | 11.10% - 12.30% | |
| Costs paid by seller | 5.00% | |
| ROUNDTRIP TRANSACTION COSTS | 16.10% - 17.30% | |
| Source: Global Property Guide | ||
Property Holding Tax
Property tax is assessed annually at a general rate of 0.1% of the average net book value of immovable property.
| Tax Type | Rate |
| Property Holding Tax | 0.10% |
