Rental tax in Andorra: rates applied by each parish

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The tax on rental income in Andorra: a communal tax that affects all property owners who rent out

In Andorra, two administrations coexist with different tax powers: the Government, which regulates state taxes such as IRPF, IS, IGI or the state ITPI; and the Comuns, which have the authority to create and manage their own taxes within each parish.

➤ If you want to understand how Andorra’s territorial structure works, you can read The parishes of Andorra: structure, functions and territorial characteristics.

This framework gives rise to a tax that many property owners are unaware of: the tax on rental income, applied to earnings from the rental of homes, commercial premises, garages, annexes and, in some cases, tourist use.

Unlike in other countries, this is not a state-level tax but a strictly communal one. Each parish passes its own tax ordinance and sets its rates, which explains why two identical properties can be taxed differently depending on their location.

When assessing real estate investment, this reality is essential.
➤ For a broader understanding of the market, you can read Guide to investing in real estate in Andorra.

🔹What exactly does this tax apply to?

The tax applies to virtually any income derived from granting the use of a property. Common examples include:

• rental of residential properties
• rental of commercial premises and offices
• subletting
• income arising from real rights of use
• income from management or assignment of exploitations
• annexes: garages, storage rooms, warehouses…

Therefore, if you earn rental income from a property located in Andorra, this tax applies to you.

This is also why it directly influences the profitability of an investment.
➤ If you want to understand taxation in the event of a sale, you may find How real estate capital gains are taxed in Andorra helpful.

🔹Who is the taxpayer?

The following may be liable:

• individuals or legal entities who own the property
• holders of real rights over the asset
• managers who assume joint liability
• civil societies, co-ownerships and autonomous estates
• non-residents, as the decisive factor is the location of the property, not the owner’s residence

🔹How is the taxable base calculated?

The base is the same in all parishes: the annual sum of rental income received.

It includes both cash payments and payments in kind.
In the case of subletting, only the margin between the rent received and the rent paid is taxed.

No deductible expenses are allowed: it is a tax on gross income.

🔹Periodicity and practical operation

Although the tax is usually accrued on 31 December, the administrative process differs between parishes:

• some require a tax return
• others issue an assessment ex officio and notify the taxpayer
• deadlines vary depending on the parish

This explains why some property owners only interact with the Comú when they receive the annual assessment, while others must file documentation proactively.

How much is paid in each parish: applicable rates (2025)

The following data come from the 2025 tax ordinances published annually by each parish.

🔹Andorra la Vella — 2025 rates

• 3% up to €40,000
• 4% from €40,000.01 onwards
• Periodicity: until 31 January of the following year.

🔹Escaldes-Engordany — 2025 rates

• 3% up to €40,000
• 4% from €40,000.01 onwards
• Periodicity: until 31 January of the following year.

🔹La Massana — 2025 rates

• 2% up to €40,000
• 4% from €40,000.01 onwards
• Periodicity: until 31 March of the following year.

🔹Ordino — 2025 rates

• 1.95% on annual rental income
• Minimum: €33 per rented unit
• Periodicity: until 31 January of the following year.

🔹Encamp — 2025 rates

• 2% flat rate
• Periodicity: until 31 January of the following year.

🔹Sant Julià de Lòria — 2025 rates

• 3.10% flat rate
• Periodicity: until 31 March of the following year.

🔹Canillo — 2025 rates

• This is the only parish that does not apply this tax.

⚠️ Deductibility against IRPF, IS or IRNR

Although it is a communal tax, it is deductible against the relevant direct taxes of each taxpayer:

• individuals: deductible against their IRPF
• companies: deductible against Corporate Tax

➤ To explore these taxes in depth, you can read The Personal Income Tax (IRPF) in Andorra and Corporate tax in Andorra: rates, special regimes and tax deductions.
➤ If you are a non-resident, you may also find The Non-Resident Income Tax (IRNR) in Andorra useful.

What if I want to buy a property as an investment? How does this affect me?

If you intend to acquire a property for investment purposes, you must comply with the conditions for foreign investment and subsequently pay the taxes that apply.

➤ To gain perspective, you can read Taxes when buying a home in Andorra.

Likewise, acquiring property in Andorra requires considering many factors beyond taxation.

If you want a full view of the process, you can read Buying property in Andorra: real risks and how to protect your investment.

🔹Property taxes: a tax similar to the IBI

Andorra has two distinct communal taxes on real estate:

• property tax, which applies to ownership and is usually calculated in €/m²
• rental income tax, which applies to rental earnings

They have nothing to do with each other. This article deals exclusively with the second of them.

Real impact for property owners and investors

Overall, communal rates range from 2% to 4%, with significant differences between parishes. This variation has a direct impact on the annual yield of any rental property and must be considered when making investment or estate-planning decisions.

Although it is independent of IRPF, IS and IRNR, its nature allows it to be deducted as a payment on account, meaning it does not create an additional financial burden compared with those taxes.

However, failing to meet declaration deadlines can lead to penalties, surcharges or late-payment interest, creating avoidable extra costs.

📞 Are you considering renting or buying property?

If you are considering renting out a property, or buying one to rent out, you can contact us through our form and we will assist you with everything you need.

Last updated: January 2026