Andorra European tax haven but IF YOU Don’t THIS! International tax lawyers | Taxes Abroad
If you want to live in a European tax haven, the first name that comes to mind for many is Andorra.
First of all, Andorra does not have taxes that aim to hit and punish the wealthiest citizens, who are instead being introduced in various Western countries, nor does it have inheritance taxes.
Andorra is also becoming increasingly popular with retirees, and the non-existence of inheritance taxes makes it even more interesting for many in the planning of generational handover.
However, there is a particular type of people for whom Andorra does not properly behave like a tax haven.
In fact, if a part of your income derives from continuous real estate investments, and you have the goal of starting to buy and resell properties located in the territory of Andorra, to generate significant capital gains after a quick renovation, you will be called to pay taxes.
In fact, there is a tax on capital gains deriving from the sale of properties located in Andorra, which, in the case of purchase and resale carried out in the same year, is equal to 15%.
However, this tax decreases from year to year, and is 1 percent in case of resale in the ninth year following the purchase.
In case of resale 10 years after the purchase or later, no tax is due.
As for income taxes, on the other hand, as we will see in detail in the next video of this series on
Andorra, there is a fraction of tax-free income, a fraction taxed in an intermediate measure, and the excess taxed with a maximum of 10%, in any case largely affordable compared to other European country.
We will discuss this aspect in detail in the next article on Andorra, because there are numerous clarifications to be made, and we need to differentiate between companies and individuals, and between different types of income.
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Buying a house in Andorra | rent in Andorra | Caution
Those who move to Andorra for tax reasons, and at the same time have the availability to live in the most prestigious areas, often choose to move to the La Massana or Ordino areas, where real estate costs are higher.
It must be said that those who have invested in property in Andorra in the last decade have made a fortune, given the increase in property value, which could reasonably continue to increase, considering that more and more people will move to Andorra in the coming years, today that remote work is spreading more and more.
In any case, it is common practice to negotiate the price of real estate.
As for apartments, it is possible to buy a one-bedroom apartment for around 80,000 euros, studios for around 75,000 euros, and two-bedroom apartments for around 140,000 euros.
Of course, prices can also increase significantly in the case of fine finishes, large terraces, breathtaking views, gardens or desirable locations.
Parking in the basement is usually included.
If your budget is high, you can also find mansions, such as 5-room chalets, for prices starting at around 0.5 million euros and up.
Keep in mind that there is also a tax of about 4% on property transfers, and that real estate agents' commissions can be high (in fact it is not uncommon to see a commission between 5 and 10%).
Renting can be an attractive alternative to buying, because rents are quite low compared to property prices, especially in the countryside.
Furthermore, it is not necessary to purchase a property to obtain a residence permit.
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