Real Estate

Steps to Buy a Property in Andorra

Jose Maria Alfin
May 16, 2023

Summary on the legal and tax implications of the acquisition of a property in Andorra

If you’ve never heard of Andorra before, be amazed at the wonders this tiny principality in Europe has to offer. Read on and find out how acquiring property in Andorra can be your next best investment.

Why Buy Property in Andorra?

Over the years, the country has transformed its economy through modernization reforms. It has become a wealthy international commercial center because of its banking sector and low taxes. With its continued tourism growth, the country has supported this boom with tax initiatives to assist a broader infrastructure.

Andorra is a country that avidly welcomes foreign investors. If you are seeking to purchase property for a vacation lot, an overseas home, or office property for your company, Andorra offers a multitude of choices for you.  

This small country offers extensive economic, financial, and tax advantages. The quality of life in Andorra also ranks as one of the best in the world. Indeed, this country in the Pyrenees is one of the most highly valued investment destinations.

How to Acquire Property in Andorra

Less than a decade ago, the Andorran government lifted all restrictions for foreigners to purchase property in Andorra. You no longer need to be a qualified resident of the country to own property in Andorra. You need to obtain permission from the authorities and follow the streamlined process.

Here is a guide to acquiring a property in Andorra. Follow these steps, and you can be a proud real estate owner in Andorra in just 4 to 6 weeks.

  • Open an Andorran Bank Account. It only takes 30 minutes to open a bank account in Andorra. With as little as €100, and with just your passport, you can securely open a Swiss-style bank account that regards anonymity to the highest. There is no limit to the amount you can deposit, and any currency is welcome.
  • Sign a Promesa de Compra-Venda or a promise to buy and sell. After you have chosen a property listing, you may sign a commitment contract with the seller. This contact indicates the purchase price, the payment terms, and the required 10% non-refundable deposit.
  • Certify the sale by paying a 10% non-refundable deposit. A 10% non-refundable deposit is made to ensure that both parties honor the agreement. This protects the seller if you change your mind about the purchase and protects you if the seller decides to sell to a higher bidder.
  • Secure the necessary permission to purchase the property from the government. You must then secure authorization to purchase property; this application form is written in Catalan and delivered to the government offices in Andorra La Vella. The approval process usually takes 7 to 14 days.
  • Acquire a Certificat D’Habitabilitat or a Habitability Certificate. The issuance of the authorization to purchase triggers the next step where the seller deploys a local architect to inspect the property and ensure it meets all government standards for living. The seller will then forward to you the Habitability Certificate.
  • Sign an Escriptura Publica to finalize the sale at a notary office. The last step in the process is finalizing the sale. Before payments are transferred, and keys to the property are handed over, the buyer and seller will sign a transfer of ownership and have it notarized.

The Capital Gains Tax on Properties in Andorra

If you are purchasing property for investment, you may want to learn about the progressive capital gains tax on all Andorran properties.

  • 15% if the property is sold within 1 year;
  • 13% if the property is sold within 2 years;
  • 10% if the property is sold within 3 years;
  • 1% less for each year after that; and
  • 0% after 12 years.
Agents Involved When Buying Property in Andorra

The main agents involved when you’re buying property in Andorra are real estate agents or lawyers. Real estate agents connect buyers and sellers and facilitate the transaction. They will make sure to find the property that’s right for you and help you through the entire process. While you don’t technically need a real estate agent, they are typically recommended. Though, keep in mind you will have to pay an agent fee, which will be a percentage of the sale price.

Lawyers are particularly helpful agents in the areas of immigration, residential and corporate commercial law. If you are looking to live or do business in Andorra after securing your property, then they are necessary to ease the transition and ensure you abide by all Andorran laws. If you find a lawyer before finding a property in Andorra, your lawyer can even help you find a home that’s right for you and guide you through the process, much like a realtor. They are highly versatile professionals that are here to help you through every step of the way.

If you’d like an expert lawyer to help you out with the process, then contact us today.

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Are You Ready to Buy Your First Property in Andorra?

This lovely country may not have huge choices for the property market. But those listed for sale certainly make up for quality over quantity. The houses, chalets, and apartments are incredibly high-quality purchases that you would want to include in your real estate folio.  

The Andorran government may have streamlined the purchasing process better, but it does not come without challenges. Andorra is a country on a mountain, and accessibility may be an issue. Choosing the best location is key to good property investment. Also, the language may be a barrier. Knowing about taxes and having the right contacts will undoubtedly make it easier.

Connect with Fintax Andorra for all your property purchase and investment needs. Fintax Andorra has a team of highly qualified lawyers, consultants, and tax advisors to take things forward with you. We can make your property ownership in Andorra easier, faster, and more convenient. Get direct access to property listings, and purchase property now.

If you are thinking in buying a property in Andorra as a good investment or even considering your movement to this tiny but interesting country, see this post about moving to Andorra.

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