Andorra Submits Urgent Law for €3M Incentives on Affordable Rental Housing

The Andorran government has submitted a draft law to the Consell General via urgent procedure, offering extensive incentives to private developers for building or refurbishing affordable rental housing. The initiative, agreed with the seven parish councils, aims to deliver 180 to 210 units across six or seven buildings, with around 30 flats each, according to Minister of the Presidency, Economy, Labour and Housing Conxita Marsol.

Developers can claim a 10% subsidy on verified construction costs, capped at €2,400 per square metre, disbursed in stages based on certifications. Applications open for two years after the law takes effect, with projects required to begin within six months of approval and finish within three years. Rents must stay below reference rates—€13.20 per square metre in 2026, adjusted by parish coefficients down to €10.56 and updated yearly by the IPC—for a minimum of 15 years. Units cannot serve tourist purposes, and owners select tenants while listing properties on portals at capped prices. Lease agreements require deposit with parish administrations for monitoring, with penalties for violations ranging from €3,000 to €10,000 for serious breaches, 50% of excess rent charged for a year, or one to two times the incentives received in the gravest cases. Property sales during the period transfer all obligations to buyers.

Additional supports include state-guaranteed bank loans at Euríbor plus 0% interest for up to 25 years, coverage for up to six months of unpaid rent (net of recoveries), and priority access to Renova scheme funding. Parish councils will waive construction licences, urban planning fees, building taxes, property taxes, rental income taxes, and their share of property transfer taxes. State exemptions cover corporate tax, personal income tax, non-resident income tax, IGI at 0%, and the government's property transfer tax portion. Urban planning perks eliminate economic cessions, relax habitability rules, bypass licence suspensions, and fast-track approvals through parish technical commissions with two government and two comú representatives.

Marsol called the package one of the boldest efforts to increase supply via private capital, noting it would not only create affordable options but also ease broader market pressures. She praised parish cooperation and voiced optimism about oversight given the programme's scale, with an initial €1.5 million annual allocation that could expand.