Buying property in Andorra: real risks and how to protect your investment

Reading time: 9 minutes

🏙️ Understanding the Andorran real estate market before you buy

Andorra’s property market is attracting unprecedented international interest: private investors, families and entrepreneurs seek legal stability, predictable taxation and a safe country to consolidate their assets. But this apparent simplicity is misleading. Buying property in Andorra requires technical judgement and an understanding of risks that do not exist in other jurisdictions.

➤ To understand the broader context, you may find our article The Andorran real estate market (2019–2025): prices, new developments and access to housing helpful

This article offers a clear and rigorous summary of the real risks we have seen in more than 50 property transactions, and how to ensure a secure purchase.

🧱 New-build property in Andorra: visible advantages and hidden risks

New-build homes are appealing: modern buildings, energy efficiency, strong demand. But they are also where many of the biggest risks appear.

🔐 Foreign investment authorisation: the main weak point

It is surprisingly common that:

• The reservation contract or “deposit” is not subject to obtaining foreign investment authorisation.
• The developer does not inform the buyer of this requirement before signing the deed (or the conditional clause).
• The buyer pays significant amounts without sufficient guarantees.

This can lead to long delays and problems when registering the property.

➤ To understand how this essential requirement works, consult Foreign investment authorisation in Andorra

📄 “Deposit” contracts that fail to protect the buyer

In many developments, the contracts signed at the start:

• Are presented as reservation contracts or “guaranteed purchases”.
• Are not true penitential deposits.
• Do not allow for clear cancellation or fair penalties.
• Do not include guarantees for construction deviations or finishing quality.
• Do not protect the buyer in case the developer breaches their obligations.

They give the impression of security, but not actual legal protection.

⏳ Delivery deadlines: who is truly responsible?

Another recurring issue concerns delivery dates:

• Real estate agencies are fully exempt from any responsibility, including delays.
• All the burden is shifted to the developer and builder.
• There are no firm commitments or penalties in case of delay.
• Some clauses allow delays caused by factors controlled by the developer.

This exposes the buyer to delays of months or even years, without mechanisms to resolve or claim compensation.

🏚️ Quality issues and serious defects

Although not the norm — Andorra usually has solid construction quality — the construction boom of recent years has produced cases of new homes with:

• Insufficient insulation
• Leaks
• Structural defects
• Finishes that do not match the specifications

Without a robust contract, making a claim is slow and complex. And most buyers lack the technical expertise to assess whether the quality matches the price paid.

🏠 Second-hand property: documentation and invisible risks

Buying a second-hand home is generally safer, provided you have full information and documentation, since enough time has passed for structural or construction defects to become visible. However, it requires a much deeper documentary review for several reasons:

💼 Community fees, special assessments and the real condition of the building

It is essential to review:

• Full community accounts
• Approved or planned assessments
• Condition of common areas and installations
• Internal disputes or claims
• Use and allocation of communal spaces

An attractive price may hide significant future costs.

🏗️ Mandatory upgrades that may increase costs

Some buildings must undertake mandatory works such as:

• Individual heat meter installations
• Thermal insulation improvements
• Replacement of old pipes or windows
• Compliance with new building regulations

These costs can be substantial and must be anticipated.

📜 The emphyteutic lease: a critical element few buyers know

The emphyteutic lease is a medieval legal institution, inherited from Catalan law and historically common in the Pyrenees. It allowed the landowner to grant use of the land to another person in exchange for an annual fee, creating two layers of ownership: direct ownership and useful ownership.

Although abolished in many countries, this system remains fully in force in Andorra, affecting properties built on older plots or in historically traditional areas.

A property subject to an emphyteutic lease implies:

• Useful ownership (not full ownership)
• Payment of an annual fee
• Limitations on transfers and certain works
• Impact on property valuations and mortgages
• No full ownership for future transfers or inheritance

It must be identified before entering into any commitment.

🧾 Registration issues with the seller

More common than expected:

• Sellers not correctly registered
• Discrepancies between registry and physical reality
• Incomplete prior transfers

These issues can delay or temporarily block the transaction.

🛠️ Renovations: technical feasibility and availability of professionals

In Andorra — due to the specific nature of the sector and current market conditions:

• Not all renovations are technically feasible
• The community may restrict certain works
• Some works require specific permits that are not always easy or economical to obtain
• It is difficult to find available professionals
• Renovation costs are high

Assessing technical feasibility and cost before buying is essential.

📑 Technical certifications: a very common hidden cost

In second-hand properties, many certifications:

• Are expired
• Or do not exist at all

Including: electricity, gas, energy efficiency, installation inspections, etc.

Renewing them involves a cost that must be anticipated before signing.

💶 Real estate commissions and lack of transparency

Commissions are a cross-cutting issue in Andorra’s property market — affecting both new-build and second-hand transactions.

• No transparency about actual commission amounts (typically around 5% of the purchase price)
• Buyers do not know who receives the commission, how much, or why
• Commissions are often high and unilaterally set
• The market is not liberalised: an Official College regulates who may intermediate

➤ For more information, see Professional bodies in Andorra: who they are and what they do

Consequences:

• Less real competition
• Less transparency
• Greater asymmetry for buyers compared with other countries

This does not mean that agencies work poorly, but that this structure reduces the buyer’s negotiating capacity.

🧭 Why you need independent and expert advice in Andorra

🏢 The real estate agency is not a legal advisor

Their role is commercial, not legal. Despite having basic knowledge of the sector, they do not usually perform a thorough review:

• They do not analyse leases, charges or registry issues
• They do not detect registration risks
• They do not condition payments to proper guarantees
• They do not represent your interests: their priority is to close the deal as fast as possible

You will likely recognise the phrase: “There is a lot of interest; it’s best to send the transfer quickly if you don’t want to lose this opportunity.”

🛡️ A specialised advisor protects your purchase

An external advisor:

• Reviews all documentation
• Analyses and reviews contracts
• Verifies essential authorisations
• Reviews charges, assessments, leases and certifications
• Negotiates real guarantees and conditions
• Accompanies you until registration at the Property Registry

Their priority is your legal security, as they are paid for the work — not for closing the sale.

🧩 Our direct experience

At ELYSIUM we have participated in more than 50 property transactions, all with successful outcomes and fully satisfied clients.

Our difference:

• No sales commissions
• No dependence on developers or agencies
• Our sole priority is protecting the buyer

We build long-term relationships, advising and supporting far beyond a single transaction.

💶 Taxation / Fiscal costs

In addition to everything mentioned, taxation is another essential element — despite Andorra’s low overall tax burden. You can learn more in our article Taxation in Andorra: structure, tax rates and real advantages

The main costs applied to the purchase price are:

• Local VAT (IGI)
• The tax on the transfer of real estate

➤ To learn more, you may read VAT in Andorra: how the indirect general tax (IGI) works or How real estate capital gains are taxed in Andorra

♦️ Other lesser-known or initially overlooked costs

Among other additional costs:

• Notary fees (around 1%)
• The foreign investment tax — see The foreign real estate investment tax in Andorra
• Registry fees (usually minor)
• Agency fees (around 5%)
• Future capital gains taxation — see How real estate capital gains are taxed in Andorra

Choosing how to buy (individual or company), when to buy and when to sell significantly affects the total cost of any real estate operation.

A good tax advisor — ideally a consultant — can provide all the answers you need, tailored to your situation.

➤ To understand the differences between professional roles, see Differences between managers, advisors and consultants

🏡 And what if I want to rent?

Renting, although scarcer and more expensive than expected, is a fully viable and common option. It also comes with risks, misinformation and strong information asymmetry.

If this is your case, we recommend the article Renting property in Andorra: from historical rigidity to new flexibility.

And if you still have questions, feel free to contact us.

🎯 Conclusion: how to buy property in Andorra with real security

Buying in Andorra can be an excellent decision, but only if you understand the real risks. Some of the most common are:

• Little or no protection in advance payments
• Contracts that are unclear or even non-compliant
• Delays in new-build projects without consequences
• Non-transparent commissions
• Expired or missing certifications
• Hidden emphyteutic leases
• Unexpected assessments
• Restrictions for future renovations or transfers
• Registration issues
• Lack of information on tax implications
• Lack of tax optimisation

An expert analysis before signing prevents costs, stress and years of litigation.

If you want independent and expert advice, professional support and someone who understands your needs as their own, you can contact us through our form.

As our slogan states, we aim to build long-term strategic relationships: a satisfied client today is a client for life.

Last updated: November 2025