Andorra Submits Urgent Law for €3M Incentives on Affordable Rental Housing
Andorran authorities propose subsidies, tax exemptions, and low-interest loans to spur private investment in below-market rental units. The initiative targets 30 flats via public-private collaboration amid housing shortages.
Key Points
- Government and seven parish councils allocate €3M over two years for 6-7 buildings with ~30 flats.
- Subsidies up to 10% of costs (€2,400/sqm max), 0% interest loans with state guarantee.
- Comúns exempt projects from taxes and fees for 15-year rental commitment.
- Incentives cover new builds, renovations, reforms, and use changes for below-market rentals.
The Andorran government is submitting a draft law on incentives for private developers to build or renovate affordable rental housing via an urgent procedure at the Consell General. The measure, a joint initiative with the country's seven parish councils (comúns), aims to expand housing supply so more families can access rentals at prices below the free market rate.
Minister Conxita Marsol highlighted the programme's two-year duration, with the government allocating €1.5 million annually—a total of €3 million—to support an estimated 6-7 buildings containing around 30 flats. Incentives cover new construction, rehabilitation of existing buildings, reforms, and changes of use to create rental properties.
Financial perks include government subsidies of up to 10% of construction costs, capped at €2,400 per square metre. Developers gain access to bank loans at Euríbor plus 0% interest, backed by a state guarantee. Additional safeguards cover six months of rent if tenants default, plus priority entry to the Renova programme.
The comúns will exempt projects from construction taxes and fees, as well as property income, ownership, corporate, personal income, and non-resident income taxes for the 15-year rental commitment period. Enrolled developments also avoid urban licensing suspensions.
Marsol stressed the public-private partnership's role in driving investment. The draft law's details are still emerging as it progresses.
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