Andorra Doubles Tax on Foreign Real Estate Investments

The Andorran government has approved changes to the regulations governing the tax on foreign real estate investment, aligning them with the omnibus 2 law on continuity and consolidation of measures for sustainable growth. The Council of Ministers gave its approval yesterday, with the decree appearing in the Official Gazette (BOPA) on Thursday and entering force immediately for relevant transactions.

The updates double the applicable rates. Foreign investors buying their first property in Andorra now face a 6% levy, up from 3%, while second homes attract a 10% rate, previously 5%. According to a government communique, the increase seeks to protect the national housing stock, directing extra state revenue toward public policies such as rental housing promotion and economic diversification.

The revised rules also ease administrative processes for exemptions. Eligible taxpayers no longer submit payments or declarations to the Taxes and Borders Department; they must simply prove compliance with legal requirements to the notary. For property investments tied to commercial operations, however, the department is required to issue a formal resolution verifying exemption eligibility.

These adjustments implement provisions of the omnibus 2 law, passed earlier this year and effective since 13 February. The changes cover all future foreign purchases across Andorra.