How to find and buy property in Andorra?

Buying an apartment, chalet or property in Andorra offers a particularly attractive tax environment. The real estate market is stable. However, a foreign buyer must take several local specificities into account: price levels depending on the parishes, foreign investment authorization, financing, source-of-funds checks, taxation and the need to appear before an Andorran notary.

The right approach is not to start solely with property listings. Before viewing properties, it is preferable to define your overall budget, your objective and your financing method, then check the administrative procedures applicable to your situation. Here is what you need to know to approach a property purchase in Andorra with a clearer understanding of the market and the acquisition process.

A better understanding of the Andorran real estate market

The Andorran real estate market has grown significantly in recent years. However, talking about an average price for the entire Principality can be misleading: location, the condition of the property, its orientation, its views and its proximity to services or ski slopes can result in significant differences.

Andorra la Vella is one of the areas where prices are generally highest. For newer apartments, they can exceed €6,500/m². Escaldes-Engordany and La Massana are also highly sought after, particularly for newer apartments, second homes and high-end chalets. In Encamp and Canillo, it is still possible to find more affordable price levels, around €4,500 to €5,000/m² depending on the property, while remaining close to ski resorts. These figures should nevertheless be considered as general benchmarks rather than a pricing grid. Two apartments located in the same parish can have very different prices per square metre.

In Andorra, orientation is in particular a criterion that should not be underestimated. In a mountainous environment, a few additional hours of sunshine in winter can significantly affect the comfort of a property and its appeal. The quality of the view, accessibility in winter, proximity to shops, parking, insulation and the condition of the building therefore deserve just as much attention as the living area.

Demand is particularly strong for modern apartments with terraces, individual chalets located at higher elevations and, for professional investors, certain commercial premises located in urban or tourist areas. For the best-located properties, supply can be limited. This is particularly true in certain high-end segments. It is therefore important to compare actual transactions and genuinely comparable listings rather than relying on a national average.

What taxes should you expect when buying property in Andorra?

Taxation is one of the reasons why foreign buyers are interested in the Andorran market. However, it should not be the only criterion in a real estate decision. When purchasing a property, the buyer must in particular anticipate taxes related to the transfer of the property, notary fees and any other costs associated with their case. The property transfer tax is generally presented as being around 4% of the purchase price, with specific rules that may depend on the nature of the transaction.

Recurring property-related charges generally remain lower than in France or Spain. However, municipal taxes may apply depending on the parish and the characteristics of the property. For a foreign buyer, the tax situation should above all be considered as a whole. Buying a property in Andorra does not automatically mean becoming an Andorran tax resident. Residency, personal taxation and property ownership are related subjects, but they are legally distinct.

Before signing, it is preferable to calculate the actual cost of the transaction based on your personal situation and have the applicable taxes confirmed at the time of purchase. As regulations may change, a simulation prepared several months earlier should not be considered definitive.

How can you search effectively for property in Andorra?

Real estate portals are a good starting point for understanding the market. They allow you to compare floor areas, neighborhoods and price levels and, above all, to gradually refine your criteria. However, you should not limit your search to listings published online. The Andorran market is relatively small, and some opportunities circulate through agencies, developers, property owners and local professional networks. Some properties may therefore be offered before they are published or deliberately remain “off-market”.

A locally established real estate agency can still be useful, provided you clearly understand its role and whom it represents in the transaction. It is advisable to provide the agency with precise specifications including the maximum budget, the parishes being considered, the desired floor area, number of bedrooms, parking requirements and the purpose of the purchase. This preparation helps avoid multiple viewings of properties that do not genuinely match the project.

During a viewing, you need to look beyond the decoration. The property's orientation, insulation, potential disturbances, winter access, condominium charges, condition of the common areas and foreseeable renovation work can have a considerable impact on the actual cost of ownership. It is also important to verify that the advertised features correspond to the property's administrative status. An extension, enclosed terrace or interior alteration should not be considered compliant simply because it physically exists.

Can you negotiate the price of a property in Andorra?

Negotiation is possible, but it depends heavily on the property and the seller's circumstances. A property that has been on the market for several months does not offer the same possibilities as a recently listed apartment in a highly sought-after area. Similarly, an offer from a buyer who has already secured financing may be viewed differently from a proposal subject to numerous conditions.

Before making an offer, it is preferable to compare the asking price with genuinely similar properties in the same area. Floor area alone is not enough. The floor, views, orientation, parking, construction quality and condition of the property should also be taken into account. Negotiation does not necessarily concern the price alone. Furniture, certain works, the handover date or various terms of the transaction can also be discussed.

What are the steps for buying property in Andorra?

Once the property has been found and the price agreed, the transaction enters a more formal phase.

A preliminary agreement or reservation contract may be signed to establish the terms of the transaction. A deposit representing around 10% of the price is common. Before making this payment, it is essential to understand precisely the conditions set out in the contract, particularly the consequences of a potential withdrawal or inability to obtain a required authorization.

For a foreign buyer, a foreign investment authorization may be required. The application may include identity documents and supporting evidence relating to the source of funds. Depending on the buyer's situation, other documents may be requested. It is preferable to anticipate this part of the process. In an international real estate transaction, delays sometimes result less from the property itself than from a banking, administrative or foreign document that is difficult to obtain quickly.

The bank also carries out its own compliance checks. The buyer must be able to explain and document the source of the funds used to finance the transaction. This customer due diligence procedure, often referred to by the acronym KYC, is part of the normal operation of financial institutions.

Once all the conditions have been met, the final sale is signed before an Andorran notary. The notary checks the elements required for the deed and formalizes the transfer of ownership.

In a transaction without any particular difficulties, several weeks may elapse between the initial agreement and the handover of the keys. A period of six weeks to three months may be a reasonable estimate, but this is not a guaranteed timeframe. The buyer's situation, financing and required authorizations may extend the process.

Why seek assistance from a Gestoria in Andorra?

The term Gestoria is very common in Andorra and Spain. For a French buyer discovering the country, its role is not always obvious. A Gestoria assists individuals and businesses with various administrative, tax and practical procedures. In the context of a real estate acquisition, it can in particular facilitate communication with the authorities and coordinate certain procedures with the other parties involved in the transaction. Its value is particularly clear when the buyer lives abroad or is still unfamiliar with how the Andorran administrative system works.

Nevertheless, it is important to distinguish between the responsibilities of each professional. A Gestoria, real estate agency, bank and notary do not have the same responsibilities. For legal or tax matters that may have significant consequences, it is advisable to verify that the professional consulted has the appropriate expertise and qualifications for the advice being requested. Good assistance does not simply consist of handling administrative procedures. It should enable the buyer to understand what they are signing, how much the transaction will actually cost and which procedures will remain to be completed after the sale.

How can you finance a property purchase in Andorra?

It is possible to apply for bank financing to purchase property in Andorra, including as a foreigner. However, the conditions depend heavily on the borrower's profile, income, assets, tax residence and the property being financed. For a non-resident, a substantial down payment may be required. A range of 30% to 40% of the purchase price is often mentioned, but each bank applies its own risk policy.

Mortgage rates must also be checked at the time of application. A historical range or a rate observed at a given point in time does not indicate the cost of financing several months later. Another option is to purchase the property outright or arrange financing from your country of origin. In the latter case, you need to anticipate banking constraints, international transfers and the requirement to document the source of funds.

In addition to the advertised property price, there are also taxes and transaction-related costs. Notary fees are generally estimated at around 1% of the price, while agency commissions can represent several percent of the property's value and are often paid by the seller. However, the exact allocation should be verified for each transaction. An apartment advertised at €500,000 never represents exactly a €500,000 investment. Taxes, professional fees, financing and any necessary work must be included before making an offer.

Does buying property allow you to obtain residency in Andorra?

This is probably one of the points that causes the most confusion among foreign buyers: owning a property in Andorra and obtaining Andorran residency are two different things. A real estate acquisition may form part of certain residency projects, particularly when a minimum investment is required. However, it should not be presented as automatically granting the right to a residence permit.

Passive residency, sometimes referred to as residency without gainful employment, is intended in particular for people who wish to live in Andorra without carrying out local professional activities under the same conditions as an active resident. It involves investment, financial resources, insurance and presence requirements that must be verified when the application is submitted.