Andorra Rental Thaw Bill Finalized with Single Amendment Banning Commercial Use of Flats

The Consell General's Economy Commission has finalised the rental thaw bill with minimal changes, approving just one opposition amendment before its expected passage on Thursday, June 4.

The sole accepted proposal, from Andorra Endavant, bars non-residents from basing commercial activities in residential apartments. Such operations must instead use suitable venues like coworking spaces, professional offices, commercial premises or industrial units. Andorra Endavant described the measure as common sense, aimed at safeguarding the residential housing stock and freeing up flats for renters. The party noted it had pushed the idea four times previously without success, crediting persistence for the consensus, which also gained support from Concòrdia and the Socialdemòcrats. Despite this, Andorra Endavant, along with Concòrdia and the PS, plans to vote against the overall law.

All other opposition amendments failed, including 42 rejected outright and a PS proposal on bolstering safeguards against the so-called "child trap"—where owners end tenancies to house relatives. Demòcrates suggested a double administrative check: prior verification of family ties up to second degree via documentation, and post-termination proof like census registration and utility hookups. Opposition parties deemed it insufficiently robust, leaving the original text with post hoc controls and tougher penalties intact.

The bill, nearly identical to the government's draft, sets a phased return to market-driven rents from 2027 to 2030. Contracts signed in 2012 or earlier, or at €6 per square metre or below, can end in 2027; 2013-2015 or up to €7/m² in 2028; 2016-2018 or up to €8/m² in 2029; and 2019-2021 until 2030. During extensions, rents adjust only by IPC. Owners must notify six months ahead of renewal or termination.

New contracts allow capped annual rises over five years—up to 6% plus IPC (capped at 2.5% initially) for rents ≤€7/m², scaling down to 1% plus IPC above €12/m². Exceptions permit recovery for major repairs, sale to an owner-occupier, employee housing or personal/family use (up to second degree, with five-year commitment). Breaches carry fines: 50% of one year's rent for excess hikes (serious), or 100% plus damages for blocking extensions (very serious).

The law takes effect January 1, 2027, with notices possible from June. Demòcrates called it balanced after over a year of consultation, while opposition criticised it as inadequate amid housing tensions.