Buying to Let in Andorra: IGI, Transfer Tax and Rents
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The short answer
On purchase, the transfer tax (4 %) applies if the seller is a private individual, and IGI applies if the seller is a professional selling a property used in their business. A reduced IGI rate of 3.5 % exists for acquisitions intended for letting, subject to conditions.
ITP or IGI on purchase
| Seller | Tax on purchase |
|---|---|
| Private individual, non-professional | Transfer tax: 4 %verified on 09/10/2026 |
| Company or professional, property used in the business | IGI: general rate 4.5 %verified on 09/10/2026 |
| Acquisition intended for letting (conditions apply) | Reduced IGI: 3.5 %verified on 09/10/2026 |
Conditions for the reduced rate: prior notification to the authorities and letting of a permanent residential dwelling for at least 5 yearsverified on 09/10/2026, with a waiting period for works.
IGI on rents
- Residential property: rents are subject to the super-reduced rate (0 %verified on 09/10/2026); the owner bears IGI on their purchases and cannot always recover it.
- Parking spaces let with the dwelling: treated together with the dwelling.
- Commercial premises: rents are subject to the general rate.
For a non-resident
The foreign investment tax is added to the purchase: see the simulator.
Comparing the three cases on a purchase
For a purchase at 300,000 euros: from a private individual, the transfer tax of 4 %verified on 09/10/2026 amounts to 12,000 euros; from a professional with IGI at the general rate of 4.5 %verified on 09/10/2026, 13,500 euros; with the reduced rate of 3.5 %verified on 09/10/2026 for a purchase intended for letting, 10,500 euros.
The conditions for the reduced rate
The reduced rate of 3.5 %verified on 09/10/2026 requires prior notification to the authorities and the letting of a permanent residential dwelling for at least 5 yearsverified on 09/10/2026. If the condition is not met, the difference may be claimed back: keep the leases and proof of rent.
Why letting is an economic activity for IGI
The letting of buildings is an economic activity within the meaning of the IGI law. IGI is in principle neutral for a professional: the IGI charged is offset by the IGI incurred, subject to conditions on use. Rents on residential property are subject to the super-reduced rate of 0 %verified on 09/10/2026.
Before signing
- Ask the seller whether they are a professional and whether the property is used in their business.
- Have the applicable regime (ITP or IGI) confirmed in writing.
- Have an adviser check the conditions for the reduced rate.
- Compare with the costs and taxes of a standard purchase.
Work out your own case
Free simulators, built on the official values of this page.
- Can I buy in Andorra? Non-resident purchase limit checkerHomes, parking spaces, annexes: does your project stay within the caps?Open
- Rental yield calculator for Andorra (gross, net, payback)Gross and net yield from your data, plus the price-per-m² estimator.Open
- Purchase tax simulator for a non-residentForeign investment tax based on your situation.Open
Frequently asked questions
Do I pay IGI or the transfer tax?
It depends on the seller: a private individual triggers the transfer tax, while a professional selling a property used in their business triggers IGI.
Is the reduced IGI rate automatic?
No, it requires prior notification and compliance with the letting period.
Does the tenant pay IGI?
For residential property, the rate applied to rents is the super-reduced rate.
Going further
Official sources
This information is general and is not personalised legal, tax or financial advice. It is verified as of the date shown and may change.