---
title: "Andorra foreign buyer tax on property rises to 6% (IEI)"
url: https://andorrefiscal.fr/en/news/foreign-property-buyers-tax-6-percent
description: "Buying in Andorra as a foreigner? Since 13 February 2026, the IEI has been 6% for a home and 10% beyond that, new residents included."
updated: 2026-10-11
language: en
publisher: Andorre Fiscal (https://andorrefiscal.fr)
---

# Buying property in Andorra: the foreign investment tax rises to 6%

> Markdown version of the page https://andorrefiscal.fr/en/news/foreign-property-buyers-tax-6-percent (Andorre Fiscal), up to date as of 11 October 2026. To cite this page, use its address: https://andorrefiscal.fr/en/news/foreign-property-buyers-tax-6-percent

Since 13 February 2026, a foreigner buying a home in Andorra has been liable for a foreign property investment tax (IEI) of 6%, compared with 3% previously for a first home, and 10% for any other property. Llei 2/2026 also widened the circle of persons liable: a resident who has been settled for less than 3 years pays like a non-resident.

By [the Andorre Fiscal editorial team](https://andorrefiscal.fr/en/about#redaction) · Published on 10 October 2026 · Updated on 11 October 2026 · Rate in force since 13 February 2026 · [7 official sources](https://andorrefiscal.fr/en/news/foreign-property-buyers-tax-6-percent#sources)

- **6%** for a home
- **10%** for other investments
- **3 years** of actual residence to stop being liable
- **90%** reduction for affordable letting for 10 years

## Key points

- Llei 2/2026, in force since 13 February 2026, raised the IEI to 6% for a home, compared with 3% for a first home previously, and to 10% for other investments.
- A “home” means a detached house, or a flat with at most 3 parking spaces and 3 storage rooms.
- The persons liable are non-residents, foreign companies or companies with a majority of foreign capital, and now residents who cannot show 3 years of actual residence in the last 10 years.
- The IEI comes on top of property transfer tax, about 4%, or the 4.5% IGI on new builds.
- Authorisation applications filed before 22 January 2026 remain subject to the former rates.

## What changed on 13 February 2026

Llei 2/2026 of 22 January 2026, published in BOPA No. 15 of 12 February 2026 and in force from the following day, amended Llei 3/2024, which created the foreign property investment tax ([IEI](https://andorrefiscal.fr/en/glossary#iei)). This tax is levied on a foreign investor who acquires a property or a right in property in Andorra, or shares in companies that hold such assets, or who carries out a property development.

IEI rates since its creation

1. 29 February 2024

   Entry into force of Llei 3/2024, which created the IEI: from 3 to 10% depending on the number of properties.
2. Spring 2025

   Llei 5/2025: 3% for a first home, 5% for a second flat, 10% beyond that.
3. 13 February 2026

   Llei 2/2026: **6%** for a home, **10%** for all other investments.

## 6% or 10%: how is the rate applied?

The 6% rate applies to an investment within the limits of one home; everything else is taxed at 10%.

**6% rate — One home**

- A detached house, or the land on which it is built
- Or a flat with at most three parking spaces and three storage rooms

**10% rate — All other investments**

- From the second flat onwards
- All subsequent purchases, once the maximum rate has been reached
- A property for which a holding condition is not met

The rate applies in bands, according to the total number of properties, taking earlier investments into account. Related entities add their properties together.

## Who has to pay the IEI? Non-residents and residents of less than 3 years

- **non-resident** individuals;
- **residents** who cannot show at least **3 years of actual and permanent residence** in the preceding 10 years, periods of study abroad counting as residence;
- foreign legal entities;
- Andorran companies owned 50% or more by foreign capital, the shares of residents of less than 3 years being counted as foreign.

> **Common misconception**
>
> “Once you are a resident, you buy like an Andorran.”
>
> **In fact.** Since 13 February 2026, a resident who cannot show 3 years of actual residence in the last 10 years has been treated as a foreign investor: they need prior authorisation, they are subject to the purchase cap (one house, or two flats, over ten years) and they pay the IEI.

## Exemptions and the 90% reduction

Three cases reduce or remove the tax:

- a **90% reduction** if the property is let at an affordable rent, as a habitual and permanent residence, for at least 10 years; if the use changes before then, the reduction is clawed back with late-payment interest;
- an exemption for inheritances and for transfers free of charge between spouses, partners or relatives up to the second degree;
- an exemption for certain business investments unrelated to residential property, held for 10 years and creating jobs.

## What does buying a €700,000 home cost a foreigner?

About €70,000 in taxes for an existing home bought from a private individual, and €73,500 for a new home sold by a developer (indicative calculation), excluding notary’s fees: the 6% IEI comes on top of property transfer tax or IGI.

**Example: €700,000 home bought by a new resident**

| Item | Existing home | New home sold by a developer |
| --- | --- | --- |
| Price | €700,000 | €700,000 |
| IEI at 6% | €42,000 | €42,000 |
| Property transfer tax (ITP, about 4%) | about €28,000 | not due |
| IGI at 4.5% | not due | €31,500 |
| Total taxes on purchase | **about €70,000** | **€73,500** |

Indicative calculation: rates applied to the purchase price, excluding notary’s fees and other professional fees. ITP combines 1% for the State and a comú share of 0.5 to 3%; practitioners use about 4%.

The IEI is paid before the purchase, as it is linked to the foreign investment authorisation: a payment on account, calculated on the amount declared in the application, is made before the favourable decision; the tax is then self-assessed and paid before the deed is signed, and the notary cannot authenticate the purchase without proof of payment or of exemption. The steps are detailed in our guide to [foreign investment authorisation in Andorra](https://andorrefiscal.fr/en/business/foreign-investment).

Before the reform, a non-resident paid 3% IEI on a first home: on this property, their tax rises from €21,000 to €42,000 (indicative calculation). A resident who has been settled for less than 3 years, who was not subject to it, now pays it in full. Remember that a purchase gives no right to residency; for [passive residency](https://andorrefiscal.fr/en/residency/passive-residency), only a property worth more than €800,000 counts towards the required investment. All the costs of a purchase are detailed in our guide to [buying a flat in Andorra](https://andorrefiscal.fr/en/living-in-andorra/buying-property).

## Transitional regime and points to check

The former rates still apply to investment authorisation applications filed before 22 January 2026, the date on which Llei 2/2026 was passed, and to purchases for which an earlier sale agreement is proven within six months. The IEI regulation was adapted by Decree 58/2026 of 25 February 2026.

The count of properties already held, the assessment of the 3 years of actual residence and the classification of ancillary properties (parking spaces, storage rooms) can change the applicable rate: have your case checked by a notary or a lawyer before signing. The subsequent loss of foreign investor status, for example after 3 years of residence, gives no right to a refund of the tax paid.

## Frequently asked questions

### I have been a resident for two years: do I have to pay the IEI?

Yes, unless an exemption applies. Since 13 February 2026, a resident who cannot show at least 3 years of actual and permanent residence in the last 10 years has been liable for the IEI, like a non-resident. They also need a foreign investment authorisation.

### What taxes does a foreigner buying in Andorra pay?

First, the IEI, at 6% for a home and 10% beyond that, payable by non-residents and by residents who have been settled for less than 3 years. Added to this, depending on the seller, is either property transfer tax (ITP) for a property bought from a private individual, which combines 1% for the State and a comú share of 0.5 to 3% (about 4% in total according to practitioners), or the 4.5% IGI for a new home sold by a developer: a sale made by a professional in the course of their business is not subject to ITP. Notary’s fees come on top.

[Read: What does buying a €700,000 home cost a foreigner?](https://andorrefiscal.fr/en/news/foreign-property-buyers-tax-6-percent#paiement)

### Is a second flat taxed at 6%?

No. The 6% rate applies only within the limits of one home; beyond that, from the second flat onwards, the IEI is 10%. A foreign individual cannot, moreover, buy more than one house, or two flats, over ten years.

### Is the tax refunded if I become a resident later?

No. Under the law, the subsequent loss of foreign investor status does not give rise to a refund of the tax paid.

## Sources

1. [Llei 3/2024 on the foreign property investment tax, consolidated version](https://www.portaljuridicandorra.ad/L2024003) — Persons liable (art. 5), rates of 6% and 10% (art. 8), 90% reduction (art. 10), payment (art. 12 to 16).
2. [Llei 2/2026 of 22 January 2026, BOPA No. 15 of 12 February 2026](https://bopadocuments.blob.core.windows.net/bopa-documents/038015/pdf/CGL_2026_02_12_10_11_12.pdf) — New rates, residents of less than 3 years, transitional regime.
3. [Llei 2/2026, Portal jurídic version](https://www.portaljuridicandorra.ad/L2026002) — Amendments to Llei 5/2025 and Llei 3/2024.
4. [Decree 58/2026 (IEI regulation)](https://www.portaljuridicandorra.ad/R20260225A) — Regulation adapted to Llei 2/2026.
5. [Llei 5/2025 on foreign investment, consolidated version](https://www.portaljuridicandorra.ad/L2025005) — Prior authorisation, cap of one house or two flats, no right to residency.
6. [Law on the ITP, consolidated version](https://www.portaljuridicandorra.ad/L20001229B) — Rate of 1% for the State and a comú share of 0.5 to 3%; sales made by a professional in the course of their business not subject to ITP.
7. [Llei 11/2012 on the general indirect tax (IGI), consolidated version](https://www.portaljuridicandorra.ad/L2012011) — General rate of 4.5%.

Consolidated texts on the Portal jurídic d’Andorra have no official value: only the version published in the BOPA is authentic. [How we verify](https://andorrefiscal.fr/en/methodology).

**General information, not advice.** This guide sets out the rules in force on 11 October 2026, based on official texts. It is no substitute for a professional review of your situation (lawyer, tax adviser, gestoria). Spotted an error or a change? [Write to us](https://andorrefiscal.fr/en/contact).

## Further reading

- [Buying property](https://andorrefiscal.fr/en/living-in-andorra/buying-property): Authorisation and taxes for foreigners
- [Foreign investment](https://andorrefiscal.fr/en/business/foreign-investment): The prior authorisation
- [Passive residency](https://andorrefiscal.fr/en/residency/passive-residency): No gainful activity in Andorra
- [Omnibus Law 2: passive residency rises to €1,000,000](https://andorrefiscal.fr/en/news/llei-2-2026-passive-residency): What changes under the law in force since 13 February 2026.
- [Taxes in Andorra](https://andorrefiscal.fr/en/tax/andorra-tax-system): Every tax and its rates