Andorra Municipal Revenues Rely on Construction and Real Estate Taxes at 14%

Municipal revenues in Andorra have shown a steady reliance on construction and real estate activity over the past three years, with these sources accounting for 14% of total income across the country's seven parishes from 2022 to 2024.

This figure means that for every €100 entering local coffers, €14 derives from the construction tax and the property transfer tax (ITP), which applies to real estate sales. While the overall average has remained virtually unchanged, significant variations exist between parishes.

La Massana tops the list for dependence. In 2022, these taxes generated 23% of its total revenues—around €22 million overall, with under €2 million from construction and just over €3 million from ITP. The ratio fell to 18% in 2023 but rose again to 19% in 2024, reflecting robust building and property market activity in the parish.

At the opposite end, Sant Julià de Lòria shows the lowest reliance, with the share ranging from 5% in 2023 to 8% in 2024. The southern parish ranks second-lowest in total revenues, ahead only of Ordino.

Escaldes-Engordany ranks second in dependence overall, though its ratio has fluctuated downward: 21% in 2022, 8% in 2023, and 15% in 2024. Canillo saw a slight uptick, from 15% in 2022 to 13% in 2023 and 17% in 2024. Encamp remained among the most stable, at 11% in 2022, 11.5% in 2023, and 9% in 2024.

Andorra la Vella mirrors the national average closely: 8% in 2022, then 15% in 2023 and 14% in 2024.

Total municipal revenues rose from €194 million in 2022 to €220 million in 2024, driven largely by growth in Andorra la Vella and Escaldes-Engordany. These central parishes accounted for 43-44% of all communal income over the period, with their construction and ITP revenues representing 12-14% of the national total. Their diverse revenue streams help explain the lower relative weight of these taxes.