Andorra's Rent Thaw Law Secures Final Approval on June 4 with Single Amendment

Andorra's rent thaw law will receive final approval on 4 June with just one amendment to the government's original text, after the Economy Commission finalised its review this week.

The bill phases out rental price freezes affecting some 20,000 contracts from 2027 to 2030. It allows annual increases of 1% to 6% based on current square metre prices, plus the IPC index. Once the intervention period ends, owners may renew or terminate contracts with six months' notice.

The Economy Commission rejected 42 of 43 opposition amendments, accepting only Andorra Endavant's proposal barring non-residents from conducting commercial activities in residential flats. Such operations must move to coworkings, professional offices, commercial premises or industrial units. Andorra Endavant described the change as a long-pursued goal—their fourth attempt—to curb "shell companies" diverting homes from the rental market. The amendment won support from Concòrdia and the Social Democrats. Despite this, all three opposition parties—Concòrdia, PS and Andorra Endavant—plan to vote against the bill in the full Consell General, leaving passage to Demòcrates per Andorra and Ciutadans Compromès.

A PS amendment addressing the "child trap" loophole—requiring pre-recovery checks such as sworn statements and family documents—failed, as did Demòcrates' counter-proposal for dual administrative controls (pre- and post-recovery verification, including census certificates and utility records) and Andorra Endavant's call for a rigorous system balancing owner rights and tenant protections. The majority favoured post-recovery checks and tougher penalties, but opposition parties found them insufficient without mandatory inspections.

The law addresses ongoing housing shortages that hamper business hiring. CEA director Iago Andreu noted growing awareness among firms that temporary workers need guaranteed accommodation to avoid precarity, given short contract durations. Companies in skiing and hospitality routinely secure below-market rentals or use word-of-mouth, with some exploring coliving for indefinite contracts. Both CEA and the Chamber of Commerce highlighted how professionals such as lawyers and architects turn down offers due to shortages. Public affordable housing requires five years' residency, offering no short-term relief for newcomers. Business groups criticised past planning shortfalls and called for government flexibility in managing the scheme, while rejecting ideas like a payroll tax on firms to fund worker housing. New public rentals and rehabilitations, they said, provide medium- to long-term solutions only.

Concòrdia leader Cerni Escalé warned that over 100,000 square metres of new commercial space by 2027—six times the size of the Pyrénées department store—could require 1,000 additional workers, adding pressure on housing, public services and social cohesion at a time when Andorra needs quality economic activities without population growth.