An article about housing could not be missing in an information portal about Andorra specialized in establishing people and businesses in the country, and that is why we have written this article. Finding a real estate that suits one's preferences is essential to live in Andorra, either bought or rented and to use as a home or as a business premises.
We usually say that the most expensive things to settle down creating a company in Andorra are on the one hand the share of the social Security and on the other hand the rental of the home (since as we remember, there is no self-employed legal figure or category). In the first case we are talking about € 450-500 per month and the second case is the one we are going to address here.
Buying and renting a home in Andorra: average prices
As we will see below, Average house prices in Andorra are similar to those of an intermediate city in Spain, both in terms of purchase and rental is concerned. Not as high in general as those of Madrid, Barcelona or Valencia but similar to those of Seville, Zaragoza, Alicante or Córdoba. It should be noted, in any case, that prices are rising despite the fact that a lot is being built due to the increased interest in living in the country, something that also Idealista warns with the search for housing.
To approximate the purchase prices of real estate properties in Andorra we can refer to multiple sources. However, surely the most truthful and the one we are going to use is the one drawn up annually and quarterly by the Andorran Statistics Department, which at the moment in 2022 is the one corresponding to 2020.
So, if we go first to the last annual press release, we have to average price per square meter of flats in Andorra It was € 2,520 in 2020, 4.6% more than in 2019 with € 2,409. With respect to median single family home price, it was € 2,237 in 2020 compared to € 2,704 in 2019, 17% less. It also offers us a table that compares 2020 with 2019 by parish, resulting in the following table of average apartment prices according to homes sold during those years:
|Parish, price in € / m2||Year 2019||Year 2020||Variation (%)|
|Canillo||1.937,7 €||2.375,0 €||22,6%|
|Encamp||1.971,8 €||2.110,0 €||7,0%|
|Ordino||2.328,2 €||2.255,3 €||-3,1%|
|La Massana||2.310,6 €||2.419,8 €||4,7%|
|Andorra la Vella||2.956,5 €||2.867,6 €||-3,0%|
|Sant Julia de Lòria||2.030,5 €||2.181,3 €||7,4%|
|Escaldes-Engordany||3.118,5 €||3.160,4 €||1,3%|
|Average price Andorra||2.409,3 €||2.520,4 €||4,6%|
We can have this same information in a more visual way with the graphs that the report also offers, both from the price of flats by parish as well as the price of housing and Andorran land according to the type of real estate:
On the other hand we have the quarterly report for the second quarter of 2021, according to which the average price per square meter of the flats was € 2,746.4 compared to € 2,836.7 in the same quarter of 2020, resulting in -3.2%. On the other hand, including the floors, homes and single-family homes and buildings, we have that the difference was € 2,767.9 in the second quarter of 2021 and € 2,590.9 in the second quarter of 2020, thus increasing by 6.8% .
It should be noted that there are other sources from which to get the data. For instance, is from Habitaclia in which the calculation is made on ads for non-single-family homes published on habitaclia.com in geographic areas with a sample of more than 50 ads and that reflects some house purchase prices in Andorra that have risen from about € 3,600 / m2 at the end of 2020 to almost € 4,000 / m2 by the end of 2021. In any case, these data are from the Habitaclia published announcements, which are part of the Andorran property fleet and usually the most expensive.
Other sources to use can be this of Hogaria.netAlthough the data does not seem very reliable and it is not shown how it was extracted, although we assume that it has been done through the publication of advertisements.
Finally, note that home purchase price is a recurring theme in the country, as we have seen in numerous press articles and notes such as east of La Valira, this other, or also east of El Periòdic Y this other or in Andorra Diffused and even in the Diari d'Andorra. In fact, the Association of Real Estate Agents of Andorra (AGIA), posts on his blog posts with some concern and they also plan to carry out a study to know the real price of the house.
Regarding rental prices, we do not have such good reports from the Andorran Statistics Department, but in the 2019 Household Budget Survey we can find very relevant information. For example 63% of Andorran households are on a rental basis, a figure that has fallen steadily since the 69% of 2015 and 106. Also that the bulk of rental homes are concentrated between 2 and 9 years of rent and between 50 and 124 square meters, with an average of 80 m2.
Regarding the rental prices, in the following table we show the average rental price in Andorra since 2015, where we see a notable increase especially from 2017.
|Half price||581 €||580 €||584 €||601 €||607 €|
However, these average prices do not take into account the size of the rented home, which is very relevant in order to get an idea of the costs of renting in the country. In this sense, the most remarkable and visual graph of the study relates the prices according to the size of the dwelling considered and taking the years from 2015 to 2019 as we show below. Therefore, the rental prices by size of the property would be as follows:
|Size||0-49 m2||50-74 m2||75-99 m2||100-124 m2||125-149 m2||> 150 m2|
|Price||446,7 €||555,6 €||600,9 €||678,1 €||755,1 €||1.278,6 €|
Another way to measure rental prices is measured per square meter of rented housing. In this sense, we also have a very instructive table that relates the price per square meter according to the rental years for the different years considered:
|Rental time / Year||2015||2016||2017||2018||2019|
|Less than 1 year||7,4 €||7,3 €||8,4 €||9,2 €||9,5 €|
|1 year||7,8 €||8,0 €||8,0 €||8,5 €||9,2 €|
|2 to 4 years||7,4 €||7,3 €||7,5 €||7,9 €||8,5 €|
|5 to 9 years||7,2 €||7,2 €||7,0 €||7,6 €||7,6 €|
|10 to 19 years||6,6 €||6,8 €||7,1 €||7,5 €||7,8 €|
|20 years or older||5,2 €||5,3 €||5,6 €||6,0 €||5,9 €|
|Half||7,0 €||6,9 €||7,1 €||7,5 €||7,7 €|
As we can see, again, a strong growth from 2017 especially in the lower tranches (that is, in the newer rents). We also see that the rental price is lower the more years you have been living in rent and that it tends to decrease with respect to the new contracts as the years progress.
In any case, the truth is that It is a very controversial and current issue in Andorra, as we can see inis Government press release, too in this article from the Diari d'Andorra or in this ofAndorra Diffused, where we can also read that household expenses account for approximately 34% of average family spending in Andorra.
Requirements to invest in housing
First of all we would like to emphasize that no need to be resident in Andorra to buy an Andorran real estate. Anyone of legal age can do it as long as they have a clean criminal record and can prove it with their proper certificate. Nor does it have any impact on prices or taxes, fees and expenses that must be undertaken, only if it is leased, the tax treatment of the returns is different.
Yes indeed, it is essential to have an Andorran bank account, since payments must be made within the Principality and constitutes proof of the legal origin of the funds contributed by virtue of the regulations against money laundering.
Andorran Government authorization
The Andorran government provides an authorization called Authorization of Foreign Investment in Real Estate which gives the right to invest in an Andorran real estate. This authorization It must be requested by natural persons who do not have residence or nationality in Andorra and legal entities domiciled abroad and it is obtained within a period of approximately 15 days.
This investment authorization it is the previous step to be able to invest in the country and allows you to invest in any of the seven parishes of the Principality and in any type of real estate property: flats and apartments, chalets and semi-detached houses, parking lots, commercial premises, land ...
Steps to acquire a property
The purchase process, once the authorization is approved, lasts about a month and a half to two months. It is a four-stage process to formalize the acquisition that we summarize below:
- Signature of the reservation contract of the real estate, between buyer and seller. The buyer pays a deposit of the 10% that validates the purchase option. It is a non-refundable deposit that acts as a purchase signal and prevents the buyer from backing out for no reasonable reason. The seller removes the property from the market for a specified period of time.
- Preparation and management of the deed of sale. Activation of the sale process by an Andorran notary, drafting of the contract and preparation for signing the deed.
- Signature of the deed of sale by both parties, in the presence of the notary. The buyer pays the remaining balance and takes possession of the real estate. The name is changed in the property deeds.
- Deed deposit of sale by the notary. The seller, for his part, usually must deliver the Certificate of Habitability of the property to the buyer, issued by a registered architect, which ensures the vital conditions of the home.
- Tax payment and municipal taxes.
In any case, it is best to go to a specialized advice to carry out all the formalities with the bank, the government, the agency / owner and the notary. At Andorra Insiders, for example, we can help you optimize your time and money in strict compliance with the law and carry out the procedure efficiently, clearly and professionally.
Notary fees to make the purchase
Usually the costs in notary fees are approximately 0.1% of property value immersed in the operation, plus a fixed amount between € 500 and € 1,500 approximately according to the value of the property purchased. The buyer is responsible for paying these notarial expenses and the corresponding taxes through a bank account in an Andorran bank.
In addition to these, if the procedure is carried out through a real estate agency, the fees that they apply should be taken into account.
Real estate tax on the sale
Taxes on home purchases
Transfers of all kinds of real estate as well as the constitution and transfer of real rights over real estate are subject to tax in Andorra from Property transfer tax (ITP). Thus, when a house, a flat or dwelling or other property is purchased, the buyer is liable for this tax.
The rate to be applied and paid is the one corresponding to the 4% of the real certified value of the property, divided into a 1% for the central administration of the Government of Andorra and a 3% for the local council or Comú. The section of the Comú is chosen by the comuns themselves between 0.5% and 3%, but in practice all have the maximum section. The exemptions apply to operations with kinship, marriage, public entities, corporate relations or donations to non-profit organizations, among others. Also if the property is going to be used to rent a minimum of 5 years and some more.
We recommend, again, going to a tax consultancy to study the case and see how to proceed.
Taxes on the sale of a property
The sale of a property, unlike what happens in other countries, is not subject to capital gains from taxes on capital or on savings, or by the Andorran personal income tax savings base. The capital gains obtained from the sale of a home or other property in Andorra are subject to a specific tax for this, called Tax on Capital Gains on Real Estate Asset Transmissions.
This capital gains tax that is revealed in the transfer of assets, onerous or lucrative "inter vivos", of all kinds of real estate, as well as in the constitution or transfer of real rights over real estate. The rate to apply varies between 0% and 15% depending on the years the property has been owned before proceeding to its sale. Thus, a home that has been owned for less than one year will be taxed at 15% and if it has been owned for more than 10 years, it will be taxed at 0%.
In any case, this tax is also more complicated and has its peculiarities. From exemptions and discounts to corrections with coefficients, ways to calculate the tax rate and withholdings. That is why we again urge you to seek professional advice.
Although there is no IBI in Andorra, there are certain communal taxes on owners of real estate, depending on the parish that applies them, the square meters of the property, its state of construction or the location, among others. These can be three:
- The traditional tax of foc and lloc, which taxes the fact of residing in a parish, regardless of the regime (rent or owner).
- The real estate tax that taxes the property per square meter. Each parish applies its type and its correction for the location of the property.
- The tax on rental income. It is applied to the income credited during the year, and it is settled at the end of the tax period. The rate ranges between 0.4% and 4% on rents according to the Comú.
Requirements to rent an apartment
Similar to the previous case, You don't have to be an Andorran resident to rent a home either, it is enough to identify yourself (ID, Passport, etc.) and have a bank account in an Andorran bank to be able to make payments for household expenses from there (rent, electricity, heating and water, internet, insurance, etc.). Nevertheless, it doesn't make much sense to rent a home without becoming a resident, much less if you are not going to become a tax resident because you will not be able to take advantage of the Andorran tax advantages.
Indefinite lease contracts in Andorra have a minimum duration of 5 years, during which the contract can be terminated by prior notice done as many months before as years of contract remain to be fulfilled at the time of leaving the house. For example, after two years in a 5-year rental apartment, it is required to issue a signed and written notice to the owner / real estate agency of 3 months before leaving the property permanently.
On the other hand, it must be taken into account that in general You must have the amount of 4 months of the rent to hire to start said contract. Of these, the equivalent of one month would be for the real estate agency as fees, two months would be deposited as security for the lease and the last would be to pay the first month of the contract. It is important to indicate that homeowners insurance is mandatory, as well as paying the annual municipal fees for lighting and cleaning.
Finally, it is advisable to make sure that, in case of looking for real estate through a real estate agent, that he is registered in the Association of Real Estate Managers and Agents of Andorra (AGIA). This is one profession regulated by the Real Estate Agents and Managers Law of the year 2000 and only those registered in said public entity can develop this work.
Find a flat in Andorra for rent or purchase
We finish the article with the best ways to search and find real estate of all kinds in Andorra. What people usually do is googling and they end up on platforms like Habitaclia, Idealistic o Pisos.com. However, in these Spanish portals, In addition to having only a small fraction of the total Andorran real estate fleet, they are usually more expensive than usual.
The Andorran housing and real estate market is unfortunately very local, very union. It is certainly a oligopoly with behavior and operation typical of a cartel. For example, all real estate agencies know each other and work together to share commissions and fees at the expense of the consumer. In addition, the regulation of the sector makes competition between them difficult.
That is why, although there are many different real estate agencies in the Principality of Andorra and we could name many of them, we believe that the best option to find housing, parking or any other type of real estate in the country is the Pisos.ad portal, a fairly local and little known portal, which does not usually appear on the internet beyond the searches carried out in Andorra.
This portal, unlike those mentioned above, yes has a vast and wide range of real estate. In addition, the majority of real estate agencies in the country publish in it, very different real estate companies with different properties (or sometimes the same). Thus, although this portal does not prevent oligopolistic and abusive practices by real estate developers, allows you to search better, compare properties among many more and even compare prices of different real estate agencies. In case any of them catches your attention, you can also contact the real estate agency with the contact information published there.
That is why we believe that, although they probably charge their own commission to the agencies to serve the ads and may be more expensive, worth using.