Foreign investment restrictions to reduce pressure on the real estate market in Andorra
One of the main measures of the Omnibus Law in Andorra is to restrict the investment capacity of foreign investors in the real estate market to avoid over-concentration and contain the rise in prices. These restrictions seek to guarantee a more stable, fair and accessible market for local residents.
WHAT IS A FOREIGN INVESTOR?
A foreign investor is any natural or legal person who, without being of Andorran nationality and who does not have effective and permanent residence there (or who cannot prove at least 3 years of residence within the last 10 years), makes a real estate investment in Andorra.
WHAT ARE THE MAIN LIMITATIONS?
1. Property Purchase:
• Foreign investors can only purchase a maximum of one villa or two flats, apartments or studios or land, including annexes (such as parking spaces and storage rooms) — which cannot exceed a total of three parking spaces and three storage rooms per unit.
• This limit prevents the massive purchase of properties by foreign investors, helping to keep the offer accessible to residents.
2. Real estate developments:
• The law generally prohibits foreign investment from allocating resources to real estate development developments.
• The only exception is when the project allocates at least 50% of the units to affordable housing.
• In addition, these developments must be located in parishes that have reviewed their urban plans and adapted them to the maximum territorial load, to guarantee responsible urban development.
WHY THESE RESTRICTIONS?
The aim is to reduce over-speculation and prevent large foreign capital from concentrating real estate, which has caused a significant increase in sales and rental prices. With these measures, the government seeks to:
• Control the expansion and qualification of land
• Prioritize affordable housing
• Promote a more balanced and sustainable market
This policy aims to ensure that real estate and urban land serve primarily the needs of citizens and not only for speculative investment, ensuring a fairer and more livable future for all residents.
