Common Mistakes When Buying Property In Andorra

Published on October 5, 2025 and written by Cyril Jarnias

Purchasing real estate in Andorra can be an appealing opportunity for many international investors. However, this process comes with its share of challenges and potential pitfalls. To help you navigate this unique market, here is a detailed guide to the most common mistakes to avoid when acquiring property in the Andorran principality.

Underestimating the Complexity of the Andorran Market

One of the first mistakes many foreign buyers make is underestimating the complexity of the Andorran real estate market. Although the principality is known for its favorable taxation and exceptional quality of life, the property purchasing process is governed by specific rules that are crucial to master.

The Andorran market has its own particularities, especially in terms of regulations and administrative procedures. For example, since 2012, non-residents can acquire real estate in Andorra, but they must obtain prior government authorization. This formality, while seemingly simple, requires careful preparation and a thorough understanding of local requirements.

Additionally, the Andorran real estate market is relatively limited, which can lead to strong competition for the most sought-after properties. Prices can vary considerably from one area to another, with significant differences between urban areas like Andorra la Vella and more exclusive ski resorts.

To avoid this mistake, it is recommended to:

• Familiarize yourself with local real estate laws and regulations
• Consult local experts, such as real estate agents and specialized lawyers
• Take the time to thoroughly study the market before making a purchase

Neglecting Legal and Tax Aspects

Another common mistake is neglecting the legal and tax aspects related to real estate purchase in Andorra. Although the country is known for its favorable taxation, there are still legal and tax obligations to comply with.

The property ownership structure in Andorra may differ from that of other countries. For example, some properties may be subject to usage restrictions or preemption rights. It is crucial to verify the exact legal status of the property before any commitment.

On the tax front, although rates are generally low, there are taxes to consider. During purchase, a 4% property transfer tax applies to the property price. Additionally, if you plan to rent out your property, rental income will be taxed at 10%.

To avoid these pitfalls, it is essential to:

• Engage an Andorran notary to verify all legal aspects of the transaction
• Consult a tax expert to understand the tax implications of your purchase
• Ensure all documents are in order and comply with Andorran legislation

A thorough understanding of the Andorran legal and tax framework is essential to avoid any unpleasant surprises after purchase.

Underestimating Hidden Costs

One of the most costly mistakes when buying real estate in Andorra is underestimating the hidden costs associated with the transaction. Beyond the purchase price, many additional fees can accumulate and significantly increase the initial budget.

Notary fees, taxes, real estate agency fees, and maintenance costs are all expenses to anticipate. For example, in addition to the 4% transfer tax, notary fees can represent about 1% of the purchase price.

Furthermore, if you buy a property in a condominium, remember to account for condominium fees which can be substantial, especially in luxury residences offering high-end services.

To avoid this mistake, it is recommended to:

• Establish a detailed budget including all costs associated with the purchase
• Request an accurate estimate of condominium fees before purchase
• Allow for a safety margin for unexpected expenses

Rigorous financial planning is essential to avoid unpleasant surprises and ensure the investment stays within the planned budget.

Ignoring the Importance of Location

In Andorra, as everywhere else, location is a crucial factor in real estate purchase. However, the criteria for a good location may differ from those in other countries, and this is where many foreign buyers make mistakes.

Andorra offers a diversity of environments, from bustling urban areas to peaceful ski resorts. Each region has its own advantages and disadvantages. For example, an apartment in the heart of Andorra la Vella may offer easy access to amenities but could be noisier and more expensive than a property in a quieter valley.

Additionally, specific factors to Andorra must be considered, such as access to ski slopes, proximity to borders with France and Spain, or sun exposure in this mountainous region.

To avoid this mistake, it is advisable to:

• Visit different regions of Andorra before making a choice
• Consider your long-term needs (work, leisure, access to services)
• Evaluate the property’s resale or rental potential

A well-chosen location will not only improve your quality of life but also ensure better appreciation of your investment in the long term.

Neglecting Property Inspection and Condition

A common mistake, particularly among rushed or enthusiastic buyers, is neglecting thorough property inspection before purchase. This oversight can lead to significant renovation or repair costs after acquisition.

Andorra, with its mountain climate, can present specific challenges in terms of building construction and maintenance. Humidity, intense cold in winter, and temperature variations can affect a property’s structure and installations.

It is crucial to check not only the general condition of the property but also specific elements like insulation, heating system, roof waterproofing, and window quality. These aspects are particularly important in a mountainous environment like Andorra’s.

To avoid this mistake, it is recommended to:

• Hire an independent expert for a detailed property inspection
• Verify the history of renovations and work performed
• Do not hesitate to request quotes for potential work before finalizing the purchase

A meticulous inspection can save you from costly surprises after purchase and allow you to negotiate the price accordingly if work is needed.

Underestimating the Importance of Financing

A common mistake among foreign buyers is underestimating the importance and complexity of financing real estate in Andorra. Although the country offers attractive financing options, the process may differ significantly from that of other countries.

Andorran banks offer financing solutions for foreign investors, but conditions may be stricter than in other countries. For example, local banks often require solid guarantees and a substantial personal contribution.

Additionally, interest rates and loan conditions can vary considerably from one bank to another. It is therefore crucial to compare offers and fully understand the financing terms before committing.

To avoid this mistake, it is advisable to:

• Begin financing procedures well before making an offer on a property
• Consult several Andorran banks to compare offers
• Consider other financing options, such as cash purchase or financing in your home country

Well-structured financing can not only facilitate your purchase but also optimize your investment in the long term.

Ignoring Long-Term Implications

Finally, a major mistake is ignoring the long-term implications of purchasing real estate in Andorra. Many buyers focus solely on the acquisition without considering longer-term aspects.

Purchasing property in Andorra can have significant implications for your tax status and residence. For example, if you plan to become an Andorran resident, property purchase can be an important step, but there are other criteria to meet.

Additionally, practical aspects of property ownership in Andorra must be considered, such as remote management if you don’t reside there permanently, annual tax obligations, or future resale possibilities.

To avoid this mistake, it is recommended to:

• Think about your long-term goals before buying (primary residence, rental investment, etc.)
• Consult a tax expert to understand the implications of your purchase on your overall situation
• Consider Andorran real estate market trends and long-term appreciation prospects

A long-term vision of your real estate investment in Andorra will allow you to make more informed and potentially more profitable decisions.

In conclusion, purchasing real estate in Andorra can be an excellent investment opportunity, but it requires careful preparation and thorough understanding of the local market. By avoiding these common mistakes and surrounding yourself with competent professionals, you will maximize your chances of making a successful and satisfying investment in this beautiful Pyrenean country.