Procedures, deadlines, and taxes you need to know about

Procedures, deadlines, and taxes you need to know about

Procedures, deadlines, and taxes you need to know about

Procedures, deadlines, and taxes you need to know about

Procedures, deadlines, and taxes you need to know about

An increasing number of people from outside the Principality are looking to Andorra as a place to live or invest their assets. And it is no coincidence: stability, legal certainty, an exceptional natural environment, and a highly competitive tax system ensure that the Andorran real estate market remains one of the most attractive in Europe.

However, buying property in Andorra as a foreigner is not exactly the same as doing so in your home country. There are specific administrative procedures, timeframes to consider from the very beginning, and a unique tax system that is best understood before signing anything. In this article, we explain everything you need to know, step by step.

An increasing number of people from outside the Principality are looking to Andorra as a place to live or invest their assets. And it is no coincidence: stability, legal certainty, an exceptional natural environment, and a highly competitive tax system ensure that the Andorran real estate market remains one of the most attractive in Europe.

However, buying property in Andorra as a foreigner is not exactly the same as doing so in your home country. There are specific administrative procedures, timeframes to consider from the very beginning, and a unique tax system that is best understood before signing anything. In this blog, we explain everything you need to know, step by step.

An increasing number of people from outside the Principality are looking to Andorra as a place to live or invest their assets. And it is no coincidence: stability, legal certainty, an exceptional natural environment, and a highly competitive tax system ensure that the Andorran real estate market remains one of the most attractive in Europe.

However, buying property in Andorra as a foreigner is not exactly the same as doing so in your home country. There are specific administrative procedures, timeframes to consider from the very beginning, and a unique tax system that is best understood before signing anything. In this article, we explain everything you need to know, step by step.

An increasing number of people from outside the Principality are looking to Andorra as a place to live or invest their assets. And it is no coincidence: stability, legal certainty, an exceptional natural environment, and a highly competitive tax system ensure that the Andorran real estate market remains one of the most attractive in Europe.

However, buying property in Andorra as a foreigner is not exactly the same as doing so in your home country. There are specific administrative procedures, timeframes to consider from the very beginning, and a unique tax system that is best understood before signing anything. In this blog, we explain everything you need to know, step by step.

Before finalizing any purchase, any non-Andorran individual or legal entity wishing to acquire real estate (or more than 10% of the capital of an Andorran company) must apply for foreign investment authorization from the Government of Andorra. This is a legal requirement—not merely an optional step—designed to ensure that the investment is transparent and complies with current regulations.

Here are some key points to keep in mind:

• Processing time: typically between 46 and 60 business days, although, in some cases, it may take a little longer; it is therefore advisable to plan the purchase with sufficient lead time.
• Cost: the fee for processing this authorization is approximately €300, separate from other transaction costs.

An important tip: if you wish to secure the property while the authorization is being processed, it is recommended to sign a reservation agreement or a deposit contract (earnest money agreement) that is conditional upon obtaining the foreign investment authorization.

Before finalizing any purchase, any non-Andorran individual or legal entity wishing to acquire real estate (or more than 10% of the capital of an Andorran company) must apply for foreign investment authorization from the Government of Andorra. This is a legal requirement—not merely an optional step—designed to ensure that the investment is transparent and complies with current regulations.

Here are some key points to keep in mind:

• Processing time: typically between 15 and 20 business days, though in some cases it may take up to two months; it is therefore advisable to plan the purchase with sufficient lead time.
• Cost: the fee for processing this authorization is approximately €300, separate from other transaction costs.

An important tip: if you wish to secure the property while the authorization is being processed, it is recommended to sign a reservation agreement or a deposit contract (earnest money agreement) that is conditional upon obtaining the foreign investment authorization.

Before finalizing any purchase, any non-Andorran individual or legal entity wishing to acquire real estate (or more than 10% of the capital of an Andorran company) must apply for foreign investment authorization from the Government of Andorra. This is a legal requirement—not merely an optional step—designed to ensure that the investment is transparent and complies with current regulations.

Here are some key points to keep in mind:

• Processing time: typically between 15 and 20 business days, though in some cases it may take up to two months; it is therefore advisable to plan the purchase with sufficient lead time.
• Cost: the fee for processing this authorization is approximately €300, separate from other transaction costs.

An important tip: if you wish to secure the property while the authorization is being processed, it is recommended to sign a reservation agreement or a deposit contract (earnest money agreement) that is conditional upon obtaining the foreign investment authorization.

Before finalizing any purchase, any non-Andorran individual or legal entity wishing to acquire real estate (or more than 10% of the capital of an Andorran company) must apply for foreign investment authorization from the Government of Andorra. This is a legal requirement—not merely an optional step—designed to ensure that the investment is transparent and complies with current regulations.

Here are some key points to keep in mind:

• Processing time: typically between 46 and 60 business days, although, in some cases, it may take a little longer; it is therefore advisable to plan the purchase with sufficient lead time.
• Cost: the fee for processing this authorization is approximately €300, separate from other transaction costs.

An important tip: if you wish to secure the property while the authorization is being processed, it is recommended to sign a reservation agreement or a deposit contract (earnest money agreement) that is conditional upon obtaining the foreign investment authorization.

1. Foreign investment authorization

1. Foreign investment authorization

1. Foreign investment authorization

1. Foreign investment authorization

1. Foreign investment authorization

2. Purchase limits for foreigners

2. Purchase limits for foreigners

2. Purchase limits for foreigners

The regulations establish a clear limit:

a foreign buyer may purchase a maximum of two properties, or only one if it is a single-family home.

This change reflects the Government's aim to balance the country's appeal for international investment with housing availability for the resident population. This is a key point to bear in mind if you intend to build a portfolio of multiple properties in the Principality.

The regulations establish a clear limit:

a foreign buyer may purchase a maximum of two properties, or only one if it is a single-family home.

This change reflects the Government's aim to balance the country's appeal for international investment with housing availability for the resident population. This is a key point to bear in mind if you intend to build a portfolio of multiple properties in the Principality.

The regulations establish a clear limit:

a foreign buyer may purchase a maximum of two properties, or only one if it is a single-family home.

This change reflects the Government's aim to balance the country's appeal for international investment with housing availability for the resident population. This is a key point to bear in mind if you intend to build a portfolio of multiple properties in the Principality.

The regulations establish a clear limit:

a foreign buyer may purchase a maximum of two properties, or only one if it is a single-family home.

This change reflects the Government's aim to balance the country's appeal for international investment with housing availability for the resident population. This is a key point to bear in mind if you intend to build a portfolio of multiple properties in the Principality.

The regulations establish a clear limit:

A foreign buyer may purchase a maximum of two properties, or only one if it is a single-family home.

This change reflects the Government's aim to balance the country's appeal for international investment with housing availability for the resident population. This is a key point to bear in mind if you intend to build a portfolio of multiple properties in the Principality.

2. Purchase limits for foreigners

2. Purchase limits for foreigners

2. Purchase limits for foreigners

From a tax perspective, buying a property involves various taxes and obligations that it is important to understand. It is also one of the issues that raises the most questions amongst our international clients:

Property transfer tax (depending on the seller):

• If the seller is a private individual, the Property Transfer Tax (ITP) 4% of the transaction price.
• If the seller is a company or a professional (such as an SL, SA, or self-employed individual), the General Indirect Tax (IGI) 4.5%.

Tax on foreign real estate investment: This is the tax that has undergone the most changes in recent years and generates the most inquiries. It applies to non-residents and to residents who cannot prove at least 3 years of actual residence in Andorra within the last 10 years. Following the recent reform, the rates are:

• 6% on the first property purchased.
• 10% on the second property onwards.

The taxation of the purchase involves several layers, and this is where our international clients most often have questions:

Property transfer tax (depending on the seller):

• If the seller is a private individual, the Property Transfer Tax (ITP) applies, amounting to approximately 4% of the transaction price.
• If the seller is a company or a professional (such as an SL, SA, or self-employed individual), the General Indirect Tax (IGI) applies instead, at a rate of approximately 4.5%.

Tax on foreign real estate investment: This is the tax that has undergone the most changes in recent years and generates the most inquiries. It applies to non-residents and to residents who cannot prove at least 3 years of actual residence in Andorra within the last 10 years. Following the recent reform, the rates are:

• 6% on the first property purchased.
• 10% on the second property onwards.

The taxation of the purchase involves several layers, and this is where our international clients most often have questions:

Property transfer tax (depending on the seller):

• If the seller is a private individual, the Property Transfer Tax (ITP) applies, amounting to approximately 4% of the transaction price.
• If the seller is a company or a professional (such as an SL, SA, or self-employed individual), the General Indirect Tax (IGI) applies instead, at a rate of approximately 4.5%.

Tax on foreign real estate investment: This is the tax that has undergone the most changes in recent years and generates the most inquiries. It applies to non-residents and to residents who cannot prove at least 3 years of actual residence in Andorra within the last 10 years. Following the recent reform, the rates are:

• 6% on the first property purchased.
• 10% on the second property onwards.

The taxation of the purchase involves several layers, and this is where our international clients most often have questions:

Property transfer tax (depending on the seller):

• If the seller is a private individual, the Property Transfer Tax (ITP) applies, amounting to approximately 4% of the transaction price.
• If the seller is a company or a professional (such as an SL, SA, or self-employed individual), the General Indirect Tax (IGI) applies instead, at a rate of approximately 4.5%.

Tax on foreign real estate investment: This is the tax that has undergone the most changes in recent years and generates the most inquiries. It applies to non-residents and to residents who cannot prove at least 3 years of actual residence in Andorra within the last 10 years. Following the recent reform, the rates are:

• 6% on the first property purchased.
• 10% on the second property onwards.

From a tax perspective, buying a property involves various taxes and obligations that it is important to understand. It is also one of the issues that raises the most questions amongst our international clients:

Property transfer tax (depending on the seller):

• If the seller is a private individual, the Property Transfer Tax (ITP) 4% of the transaction price.
• If the seller is a company or a professional (such as an SL, SA, or self-employed individual), the General Indirect Tax (IGI) 4.5%.

Tax on foreign real estate investment: This is the tax that has undergone the most changes in recent years and generates the most inquiries. It applies to non-residents and to residents who cannot prove at least 3 years of actual residence in Andorra within the last 10 years. Following the recent reform, the rates are:

• 6% on the first property purchased.
• 10% on the second property onwards.

3. What taxes you will pay when buying

3. What taxes you will pay when buying

3. What taxes you will pay when buying

3. What taxes you will pay when buying

Foreign investment in Andorra remains a solid option, though the regulatory framework has become more demanding in recent years; factors such as limited quotas, higher taxes, and purchase limits did not exist previously. This does not mean investing is more difficult, but rather that it requires advance planning and the right professional guidance.

At Sutte Immobiliaria, we specialize in guiding international clients through the entire process—from property searches and securing foreign investment authorization to coordinating with notaries and tax advisors. Our goal is to ensure you can invest in Andorra with confidence, free from surprises, and with clear information from day one.

This article is for informational purposes only and does not replace personalized legal or tax advice. If you are considering investing in Andorra, contact us, and we will help you take the first step.

Foreign investment in Andorra remains a solid option, though the regulatory framework has become more demanding in recent years; factors such as limited quotas, higher taxes, and purchase limits did not exist previously. This does not mean investing is more difficult, but rather that it requires advance planning and the right professional guidance.

At Sutte Immobiliaria, we specialize in guiding international clients through the entire process—from property searches and securing foreign investment authorization to coordinating with notaries and tax advisors. Our goal is to ensure you can invest in Andorra with confidence, free from surprises, and with clear information from day one.

This article is for informational purposes only and does not replace personalized legal or tax advice. If you are considering investing in Andorra, contact us, and we will help you take the first step.

Foreign investment in Andorra remains a solid option, though the regulatory framework has become more demanding in recent years; factors such as limited quotas, higher taxes, and purchase limits did not exist previously. This does not mean investing is more difficult, but rather that it requires advance planning and the right professional guidance.

At Sutte Immobiliaria, we specialize in guiding international clients through the entire process—from property searches and securing foreign investment authorization to coordinating with notaries and tax advisors. Our goal is to ensure you can invest in Andorra with confidence, free from surprises, and with clear information from day one.

This article is for informational purposes only and does not replace personalized legal or tax advice. If you are considering investing in Andorra, contact us, and we will help you take the first step.

Foreign investment in Andorra remains a solid option, though the regulatory framework has become more demanding in recent years; factors such as limited quotas, higher taxes, and purchase limits did not exist previously. This does not mean investing is more difficult, but rather that it requires advance planning and the right professional guidance.

At Sutte Immobiliaria, we specialize in guiding international clients through the entire process—from property searches and securing foreign investment authorization to coordinating with notaries and tax advisors. Our goal is to ensure you can invest in Andorra with confidence, free from surprises, and with clear information from day one.

This article is for informational purposes only and does not replace personalized legal or tax advice. If you are considering investing in Andorra, contact us, and we will help you take the first step.