Sales and rentals

Buy / Sell - Expenses

When buying a flat, apartment, house or land in Andorra, the expenses to take into account are the following:

For the seller:

• Agency commission: usually 5% (minimum 5%, maximum 10%). On the bill of the agency fees must be added 4.5% for indirect taxes (IGI).
• Real estate gains tax: This tax consists of a maximum of 15% on the gain obtained, in the case that less than one year has gone by since the purchase. It decreases according to the time and becomes 0% when it was purchased over 10 years ago. In Andorra there are some exceptions and exemptions provided by law. In the event that the seller is a foreigner, a 5% withholding tax will be exercised (the Ministry of Finance will return the amount exceeded the tax quota within a maximum period of 6 months).
• Expenses derived from obtaining the certificate of habitability, if any is already available. Those interested in buying the apartment can demand the certificate of habitability and, for a qualified professional to deliver it, it may happen that some works must be carried out in accordance with current regulations, depending on the state and the age of the apartment.
• Expenses derived from obtaining the certificate of payment of community expenses. The presentation of this certificate at the time of the sale purchase deed is mandatory.
• Other expenses: some Commonwealths require Notaries that in the deed of the purchase of the fllat is attached the presentation of certificates of payment of taxes and community fees.

For the buyer:

• Normally, in Andorra, the payment of 10% is calculated as a reservation of the apartment where a private deed of sale promise is signed.
• Real estate transfer tax (ITP). It currently consists of 4% on the amount of the purchase and sale. It is collected at the notary on the day of the signing of the public deed sale. In Andorra there are some exceptions and exemptions provided by law. In the event that the seller is a legal entity (or natural person with economic activity), instead of ITP, the indirect general tax (IGI) is required, equivalent to 4.5% of the purchase price.
• Notarial fees. Forwards from 0,53% to 0,22% if the amount is between 120,202.42 and 601,012.10 euros (decreasing scale according to the amount), respectively, according to the legal fee scale that establishes a fixed amount by section and another variable according to the amount of excess. From € 601,012.10 the notary fees are € 1,268.14 + 0.1% over the amount that exceeds.
• The pending carriage of the amount of the purchase sale, as well as the expenses mentioned, is paid by the buyer on the day of the signing of the public deed sale in the presence of a notary established in the Valls of Andorra.

Important note: Foreigners wishing to buy property in Andorra are subject to prior authorization by the Government.

Rent in andorra - Expenses

When renting an apartment in Andorra, the expenses are as follows:

• Guarantee deposit: equivalent to 2 months of lease. This deposit covers the fulfillment of the contractual obligations on the part of the lessee as well as the possible damages that can be caused in the rented property. It is returned when leaving the property.
• Agency fees: equivalent to 1 month lease, by the tenant. On the agency's fees should be added 4.5% for Indirect Taxes (IGI). 
• Rent for the first month: leases are paid in advance months.
• Forecast of monthly expenses: many landlords demand a monthly forecast corresponding to the expected consumption of heating and hot water. Once a year, the actual cost of consumption is settled, loading or paying the tenant the difference.

Important Note: The duration of a lease is 5 years. After this period you can renew tacitly from year to year.

Mortgages

The most basic about the mortgage.

Logically, when a financial institution grants a mortgage loan, it does it with certain conditions based on the income of the applicants.

These are the components of the mortgage loan that must be valued:

• The amount requested: when a mortgage loan is requested, the financial institution performs (or requires) a house appraisal to know its value: in Andorra, at present, a financial institution may be willing to lend 70% of the value of the property (50% for second homes).
  
• The term of return: the most common terms are 20-25 years, but with the limit of the amortization time when the applicant completes 70 years.
• The interest rate: they can be fixed, variable or mixed. In Andorra the most common are the variable types resulting from the addition of a differential (from 1 to 2 points) to the Euribor index.
• The quotas: although a priori could be agreed upon at different periods, they are usually always monthly. The quotas can be constant (the same amount is always paid) or they can vary over time (variable quotas), being the first most common option.
• Annual equivalent rate (TAE): it is calculated with the annual interest and includes the expenses of the mortgage; It is the most reliable value to compare offers from banks to others.