Buying Property in Andorra Real Estate Market: Non-Residents Authorization Suspended Provisionally

Jose Maria Alfin
October 6, 2023

Andorra Parliament has approved urgently, this suspension for transactions carried out by non-residents in Andorra properties. This new law will enter into force the same date of its publication in the Andorra Official Gazette,.

Amidst the picturesque landscapes of Andorra, the real estate market faces a temporary suspension of the non-resident foreigners' re-resident authorization. Understanding the situation, its implications, and how to navigate this period is crucial for those looking to invest in this enchanting country’s property market. Let’s delve into the reasons behind the suspension, its impact on foreign investors, and how to prepare for the reinstatement of Andorra real estate market non-resident authorization suspended provisionally in Andorra.Key Takeaways

  • Andorran government has temporarily suspended non-resident authorization in the real estate market.
  • Non-residents must obtain Prior Authorization for Foreign Investment from the Ministry of Economy and Finance of Andorra to legally acquire property.
  • Potential buyers should research the local market, build connections with local professionals, and stay informed of regulatory changes before investing in Andorra’s real estate.

Temporary Suspension of Non-Resident Authorization

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To safeguard the local market from foreign investors, the Andorran government has provisionally suspended the sales process for non-resident authorization in the real estate market. This decision significantly impacts foreign investors, including any foreign investor now barred from purchasing property in the country. Reasons for SuspensionVarious factors could have prompted the suspension of non-resident authorization, including regulatory changes, market fluctuations, or shifts in government policy. The Andorran government aims to protect the local market, including commercial property, from being disproportionately influenced by foreign investors, which could also affect inheritance tax planning. Impact on Foreign InvestorsThe suspension directly impacts foreign investors in Andorra, as they are now unable to acquire properties in the country. The government has instituted new screening and approval processes for incoming foreign investments to ensure sustainable growth and control the rise in foreign investment in real estate. The new Law for Foreign Investments in Andorra stipulates that all Andorra residents can acquire property without restrictions, whereas non-residents must obtain authorization for purchase process from the Andorran government. Expected Duration of SuspensionThe government has not defined a precise timeline, leaving the expected duration of the suspension uncertain. The duration could be influenced by the government’s evaluation of the current situation and the measures implemented to address it. Investors need to stay vigilant, tracking updates from governmental entities and local real estate experts to keep abreast of any updates to the suspension. Andorra Real Estate Market Overview

Andorra’s real estate market offers various property types and prices, catering to various preferences and budgets. Factors such as location, accessibility, and amenities influence market growth and demand in the country. The country’s strategic location in the Pyrenees Mountains makes it a desirable destination property Types and PricesAndorra’s real estate market boasts a variety of property types, including:

  • Apartments
  • Chalets
  • Villas
  • Commercial properties

The price of these luxury properties depends on factors such as location, size, and features. Proximity to ski resorts, major thoroughfares, town centres, urban centers, and educational institutions can contribute to higher property values. Market Growth and Demand Over the years, Andorra’s real estate market growth rate has varied, with recent years reporting an increase of 5.8% to 10%. Limited supply, proximity to ski resorts, and favourable tax regulations are primary contributors to market growth and demand in Andorra’s real estate market. Alternatives for Non-Residents During Suspension

As long as the suspension of non-resident authorization remains in effect, non-residents have the option to explore alternative investment avenues like entering joint ventures with local partners or renting properties. These alternatives provide non-residents with the opportunity to access Andorra’s real estate market without directly purchasing property. Joint Ventures with Local Partners Joint ventures with local partners involve a collaboration between two or more parties to attain a common goal. This form of investment enables foreign investors to benefit from the local knowledge and expertise of their local partners, who can provide international organization with valuable insights into the domestic market, consumer preferences, and regulatory requirements. In addition, local partners often have established connections with government bureaucracies, regulatory bodies, and international institutions, which can streamline the process of obtaining permits, licenses, and approvals. Renting PropertyRenting property in Andorra is a viable alternative for non-residents during the suspension period. By leasing property, non-residents can gain access to the Andorran market without committing to a long-term acquisition. This option also allows non-residents to benefit from the appreciation of the property value over time and take advantage of the lower taxes and fees associated with renting property in Andorra. Legal Requirements for Property Investment in An

Understanding the legal requirements is a prerequisite when investing in Andorra’s real estate market. Some of these requirements include obtaining government permissions, paying taxes and fees, and understanding the local market and regulations. Before investing your own business in Andorra, conducting research on the local market and regulations is crucial. Obtaining Government PermissionsTo legally acquire real estate in Andorra, non-residents must secure Prior Authorization for Foreign Investment. This permit can be secured by submitting an application to the Ministry of Economy and Finance of Andorra, along with the necessary documents. Alternatively, non-residents can acquire passive residency in Andorra, which facilitates the acquisition process and offers additional advantages over civil status, including obtaining a residence permit. Taxes and Fees Taxes and fees associated with property investment in Andorra include property transfer tax, capital gains tax, and notary fees, which vary based on the property’s value and transaction details. The costs associated with buying property in this country include:

  • Property transfer tax: 4% of the sale price, with 1.5% going to commune funds and 2.5% going to government accounts
  • Capital gains tax: a regressive taxation rate that can affect a seller’s return on investment
  • Notary fees: ranging from €600 to €1300, plus 0.1% of the property price

Preparing for the Reinstatement of Non-Resident Authorization

Anticipating the reinstatement of non-resident authorisation, non-residents should familiarise themselves with the Andorran real estate market, establish connections with local professionals and public institutions, and stay updated on regulatory changes. By doing so, they can better prepare for future investment opportunities in the country and navigate the financial system effectively. Researching the MarketConducting in-depth research can assist non-residents in understanding the available property types, market trends, and potential real estate investments in Andorra’s real estate market. Comparing property prices in different areas, visiting properties in person, and consulting with real estate agents and lawyers can provide valuable insights into real estate transactions in the market. Taking the time to research the market can help ensure that potential buyers have adequate knowledge to make informed decisions and getBuilding Connections with Local ProfessionalsBuilding relationships with local professionals like real estate agents, lawyers, and financial advisors, as well as real estate agencies, can offer valuable insights, services and support to non-residents upon reinstatement of the non-resident authorization. These professionals possess knowledge of the Andorran real estate market and can assist non-residents in navigating the complexities of the property investment process.


In conclusion, understanding the temporary suspension of non-resident authorization in Andorra’s real estate market is essential for foreign investors looking to invest in the country. By researching the market, using official language, building connections with local professionals, and exploring alternative investment options, non-residents can prepare for the reinstatement of non-resident authorisation and make informed decisions about their property investments in Andorra.

The Official Gazette of the Principality of Andorra has published on September 22nd 2023 the final version of the law. This Act has entered into force the same date of publication.

Due to the relevancy of the new law, we have uploaded a very brief video at our youtube channel that you can watch here.

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