Guide to Relocating and Buying a Property in Andorra

Andorra offers an exceptional quality of life, attracting individuals from around the world for its low taxes, stunning landscapes, and political stability. If you are considering relocating to Andorra and purchasing property, it is essential to understand both the residency requirements and the legal process of buying real estate. With the help of Axior Global, you can navigate these steps with ease, ensuring that you comply with local regulations and make the most of Andorra’s attractive financial incentives.

Why Buy Property in Andorra?

Tax advantages: there is no wealth tax or inheritance tax, and corporate tax rates are highly competitive.
High quality of life: Andorra offers a safe environment, excellent healthcare, and abundant outdoor activities like skiing and hiking.
Strategic location: nestled between Spain and France, Andorra offers access to European markets and is a short distance from major cities like Barcelona and Toulouse.

Steps to Buy Property in Andorra

Determine Residency Type: residents can buy property in Andorra, but you must first establish your residency status (active or passive).
Search for Property: choose a property within your budget and requirements, including apartments, houses, or land.
Open an Andorran Bank Account: a local bank account is necessary for the transaction and to transfer the required deposit.
Make a Deposit: a reservation fee (typically around €3,000) is required to secure the property while completing legal formalities.
Sign a Contract: once the terms are agreed upon, you will sign a purchase contract (Escritura de Compraventa).
Pay Taxes and Fees: property taxes, registration fees, and notary fees must be paid to complete the purchase.
Register the Property: the property must be registered in the Andorran Land Registry to confirm ownership.

Residency Requirements for Property Buyers

To buy property in Andorra, you generally need to establish residency. There are two main types of residency:

Active Residency: for those who plan to work or operate a business in Andorra.
Passive Residency: for retirees or individuals with sufficient financial means to support themselves without employment in Andorra.

The minimum financial requirements for both types of residency vary but typically require:

A minimum investment of €600,000 (which can include property, financial assets, o business investments).
Proof of accommodation (property purchase or rental agreement).
Health insurance.
A clean criminal record.

Property Taxes in Andorra

When buying property in Andorra, there are several taxes and fees to consider:

Tax or Fee	Amount	Details
VAT (IGI)	4.5%	Applies to property purchases; higher rates may apply for new developments.
Property Registration Fee	Variable	Depends on property value and location.
Notary and Legal Fees	1–1.5%	Based on the property purchase price.
Annual Property Taxes	Small	A municipal tax based on property value.
Capital Gains Tax (CGT)	0% after 10 years	Up to 15% if the property is sold within 10 years of purchase, with a progressive reduction.

Upcoming Legislative Changes (Effective March 2025)

Starting March 2025, Andorra is expected to implement the following legislative changes regarding property ownership and taxation:

Increased Capital Gains Tax Rates: the capital gains tax for properties sold within the first ten years will be progressive, starting at 15% in the first year and decreasing annually until it reaches 0% after 10 years.
New Property Registration Guidelines: enhanced transparency requirements for foreign buyers.
Adjustment to VAT on New Developments: a potential increase in IGI for newly built properties to 5%.

How Axior Global Can Help

Residency Applications: guidance through residency options to enable property purchase in Andorra.
Tax Advisory: assistance with optimizing your tax situation, including property-related taxes and income tax.
Legal and Notary Support: review and support with purchase contracts and legal formalities.
Bank Account and Registration: help with opening a bank account and ensuring proper registration with the Land Registry.

Conclusion

Relocating and purchasing property in Andorra is a highly attractive option for those seeking a low-tax environment, a high quality of life, and a strategic location within Europe. By working with Axior Global, you can ensure a seamless transition, from residency applications to property purchases and tax optimization. Our expertise and support will help you navigate Andorra’s unique legal and tax landscape, ensuring compliance and maximizing benefits.

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