Andorra Doubles Tax on Foreign Real Estate Investments

The Andorran government approved modifications yesterday 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 decree appeared in the Official Gazette (BOPA) on Thursday and applies immediately to all relevant transactions.

The updated rates double the previous charges: foreign investors buying their first property in the principality now face a 6% levy, up from 3%, while second homes carry a 10% rate, previously 5%. Government officials stated the increases seek to protect the national housing stock, directing the extra revenue toward citizen-focused initiatives such as rental housing promotion and economic diversification.

The revisions also ease administrative processes for exemptions. In eligible cases, taxpayers no longer submit payments or declarations to the Taxes and Borders Department; instead, they present qualifying evidence directly to the notary. Commercial real estate investments, however, require a formal resolution from the department to confirm exemption criteria under the law.

The omnibus 2 law took effect on 13 February after approval earlier this year, prompting these regulatory adjustments for consistency. The changes affect prospective foreign property purchases across Andorra.