The tiny principality of Andorra enjoys 300 days of sunshine per year, two ski resorts, and virtually no crime. The mountain air is clean and the climate and landscapes provide the perfect backdrop for outdoor activities such as hiking, cycling and getting in touch with nature. Bordering France and Spain, a three hour drive South is all it takes to visit Barcelona and a similar distance to the North separates Andorra from the picturesque French town of Toulouse. These reasons alone make it a tempting prospect for expats, but residency and tax reforms make the prospect of buying property in Andorra even more appealing.
Tourism in Andorra accounts for 80% of the microstate’s GDP and up until 2012 the government of Andorra generated its revenue exclusively through import tariffs. Even now after enforcing taxation, the highest rate of income tax in Andorra is just 10%. What’s more, there is no inheritance tax in Andorra and British wills are recognised as binding here. The tax benefits continue when it comes to buying property in Andorra too.
New UK stamp duty laws which came into effect on the 1st of April this year mean an additional 3% stamp duty will be levied on purchases of second homes in Britain. In contrast, combined government and local stamp duty in Andorra is only 4%. This makes the cost of buying property in Andorra significantly lower than the cost of buying a second home in the UK in this regard. An additional benefit is that, if you’ve owned property in Andorra for more than 12 years, there is no capital gains tax. Expat Focus provides comprehensive detail about the rules and regulations that govern purchasing property in Andorra.
Expats who love to ski will appreciate Andorra’s two ski resorts of Grandvalira and Vallnord. Between them the resorts boast over 175km (109 miles) of ski slopes and buying property with easy access to them is considerably less expensive than many other European ski resort alternatives. For a luxury mountain apartment in Andorra within driving distance of the slopes, you can expect to pay around 1320 EUR per square foot. Luxury apartments in the town are more expensive at around 2800 EUR per square foot but this is still less than French resort Chamonix, for example, where prices average around 3000 EUR per square foot.
If you do decide to buy property in Andorra, there are two main residency categories that are likely to apply to you. The simplest and most commonly applied for category, Category A residency, requires that you spend at least 90 days per year in the country and requires a refundable but non-interest bearing bond of 50,000 EUR to be paid to the government (plus 10,000 EUR for each dependent). Within seven months you must also show that you have invested at least 400,000 EUR in Andorra, which can include the purchase of property.
Category B residency is for those starting a business in Andorra. As well as providing a refundable bond like Category A, Category B applicants need to have started a business in Andorra within seven months. However, Category B applicants are exempt from having to prove investment of 400,000 EUR in the principality. There are also two further categories, Categories C and D, for famous or internationally renowned applicants and permanent residents respectively.
If you are looking to purchase property in Andorra and require assistance moving, Cadogan Tate will help you every step of the way. From your initial enquiry to unpacking at your new home, Cadogan Tate are here to help and advise you. Find out more about our specialist international removals services from London.
Information correct at time of publication.