Between Spain and France in the Pyrenees mountains is a tiny nation called Andorra. Tourism is a key factor in the economy of the nation and it is well known for its ski resorts and for being a tax haven. Residential properties have traditionally dominated the Andorran real estate market, but there is also a market for commercial properties, especially in touristy areas like the capital city of Andorra la Vella. There are options for buying, renting, and leasing commercial, industrial, and retail properties. The country’s expanding economy and reputation as a top tourist destination are the main factors driving the demand for commercial real estate in the nation. Depending on the location and type of property, prices for commercial properties in the nation can vary greatly, but generally speaking, they are more expensive than in other parts of Europe because of the country’s high demand for real estate and its constrained supply.
Registering your company
Any kind of business in the nation must be registered before it can operate. Select the best legal structure for your real estate company, then register it with the Company Register. It is advised that you work with a local real estate agent or broker who is knowledgeable about the market and can guide you through the process if you’re interested in buying or renting commercial real estate in the nation. A legal expert should be consulted to make sure that all necessary papers and contracts are in place.
How to buy real estate in Andorra
The Andorran government abolished all restrictions on foreigners buying property there less than ten years ago. To own property in Andorra, you are no longer required to be a legal citizen of the nation. All you have to do is ask the authorities for permission and follow the simple steps. A guide to buying property is provided below:
Open an Andorran bank account
Opening a bank account only takes 30 minutes. You can securely open a Swiss-style bank account that prioritizes anonymity for as little as €100 with just your passport. You are allowed to deposit an unlimited amount in any accepted currency.
Sign a promise to buy and sell (promesa de compra-venda)
Following your selection of a property listing, you and the seller may agree to a commitment agreement. The purchase price, the terms of payment, and the necessary 10% nonrefundable deposit are all stated in this contract.
Confirm the sale by making a 10% non-refundable deposit
To ensure that both parties uphold the agreement, a 10% non-refundable deposit is made. This safeguards both parties in case you decide against making the purchase and the seller decides to sell to a higher bidder.
Obtain the government’s approval for the purchase of the property
The next step is to obtain permission to buy property. To do this, submit an application form—written in Catalan—to the Andorran government offices in Andorra La Vella. Typically, the approval procedure takes 7 to 14 days.
Obtain a habitability certificate, also known as a certificate d’habitabilitat
The seller will send a local architect to inspect the property and make sure it complies with all building codes after issuing the authorization to purchase. The Habitability Certificate will subsequently be sent to you by the vendor.
Sign in Escriptura Publica at a notary public’s office to complete the transaction
The sale must be completed as the process’s last stage. The buyer and seller will sign a transfer of ownership and have it notarized before funds are exchanged and keys to the property are given.
Selling real estate in Andorra
It’s wise to estimate how much your property will need to rise in value for you to repay your expenditures before deciding to buy. Agent fees, government purchase taxes, and capital gains taxes are the main factors to take into account when acquiring property in Andorra. In Andorra, sellers’ agent fees may go as high as 10%, although they’re often no more than 5%. When buying a property, taxes will be 4% of the price. This consists of: 1.5% of the selling price which is a fixed tax that is paid to the commune (the local government), and 2.5% which is an ITP that is paid to the Andorran government. Capital gains taxes on property in Andorra are computed based on the following schedule:
- Properties owned for less than a year: 15%
- One to two years: 13%
- Between two and three years: 10%
- Three to four years: 9%
The taxes are decreased by 1% after the fourth year. Therefore, real estate in Andorra is not subject to capital gains tax after 12 years.
