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This overview is intended to inform you about the laws and regulations when buying or selling a property in Andorra .
BUYING PROPERTY IN ANDORRA :
The law on Foreign Investment in Andorra ( "Llei d' Inversio Extrangera" ) has entered into force.
This means that both, foreign residents (excluding those with a temporary work permit ) and persons with the Andorran nationality may buy properties in Andorra on personal title without any limitation.
In practice this means that those with Andorra Residency and Andorra nationals can go to the Notary and make a purchase - sale directly without the need of previous permissions.
Every non - Andorra resident should apply for a buying permission to the Andorra Government by filling out an application form called "Autorització d' Inversio Estrangera en Immobles".
This form must be filled out and mention who the buyer is, what real estate is bought, the purchase price and method of payment. The application can last from 2-4 weeks. Sometimes less.
A Acquisition Tax of 4% of the purchase price has to be paid to the Government in case both buyer and seller are private individuals.
If the seller is a Company a 4,5% taxation is applicable. In this case the (selling) Company will have to invoice the buyer and will be held responsible for paying the Andorra Government.
When signing the Title Deed at the Notary a banker's draft from an Andorra based bank must be handed over to the Notary who is responsible for the payment to the Government .
By law the seller is obliged to hand over a "Certificat d'Habitibilitat" to the buyer.
This document, drawn up and signed by an authorized architect, states that the property fullfils with all legal requirements and obligations for being allowed to live in it.
Also a Certificate from the Town hall to prove no debts and (in case applicable) a Certificate from the Co-owners community that at the moment of transferring the property there are no outstanding debts.
When selling Real Estate in Andorra, following Capital Gains Tax has to be paid to the Government :
15 % of the sales price when selling within a year after purchase ;
14 % when selling within two years ;
13 % when selling within 3 years ;
12 % when selling within 4 years ;
10 % when selling within 5 years ;
8 % when selling within 6 years ;
6 % when selling within 7 years ;
4 % when selling within 8 years ;
2 % when selling within 9 years ;
1 % when selling within 10 years ;
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after 10 years one is exempt from paying any tax on Capital Gains.
An inflation adjustment will be applied by calculating the difference between the date of purchase and the date of sale. This amount will be deducted from the amount payable on Capital Gains.
Notary fees (indicative) :
For real estate with a price between € 120,000 and € 300,000, the cost approximately €600 + 0.2 % of the purchase price .
For real estate with a price between € 300,000 and € 600,000, the cost approximately €1,000 + 0.1 % of the purchase price .
For properties with a purchase price above € 600,000, the cost approximately €1,300 + 0.1 % of the purchase price .
The costs for transferring property under the Andorra Law are to be born by the buyer.
On the Public Notary's invoice a 5% tax is levied and paid to the Government.
Click here to view Andorra real estate properties for sale
Herman Blom
Managing director
Homeinandorra is owned by Hollandor, SLU
