Last updated on November 7, 2025
No. Foreign investors are limited to one plot with a single-family home or up to two housing units, plus associated spaces. Additional purchases are only possible under specific exemptions, such as committing the property to affordable rental for at least 10 years.
Andorra’s Real Estate Rules in 2025
Andorra, a microstate nestled in the Pyrenees, has long been a magnet for international investors drawn by its tax advantages and alpine charm. However, the surge in foreign acquisitions over recent years created mounting pressure on housing availability for residents. In response, the government enacted Law 5/2025 on Sustainable Growth and the Right to Housing, a sweeping reform that reshaped property ownership rules for non-residents. This law is not just about limiting purchases—it’s about balancing economic openness with social responsibility. It introduces caps on foreign ownership, regulates tourist-use properties, and incentivizes affordable housing projects.
The Core Restriction: Two Properties Maximum
Under the new framework, foreign investors may acquire:
- One plot with a single-family home
- Up to two housing units (apartments or studios) with associated spaces, such as a maximum of three parking spots and three storage rooms
- Up to six parking spaces in total, even if linked to different units These limits apply only to acquisitions made after the law’s entry into force. Properties owned before the reform do not count toward the cap, meaning existing holdings are grandfathered in. However, any new purchase beyond these limits requires an exemption.
What If You Already Own Two Properties?
If you already own two properties in Andorra, you cannot buy a third under normal circumstances. The law is explicit: exceeding the cap without qualifying for an exemption will result in denial of authorization. This rule applies regardless of whether the properties are residential or mixed-use.
The Exemptions: When More Is Allowed
The government recognizes that housing policy must also encourage socially responsible investment. For this reason, specific exemptions allow foreign investors to acquire additional properties if they meet certain conditions:
Affordable Rental Commitment
Investors can purchase more than two properties if they commit the new acquisition to long-term affordable rental for a minimum of 10 years. This measure aims to increase housing supply for residents and stabilize rental prices. The property must meet official affordability criteria set by the Ministry of Housing.
Public Interest Projects
Projects that contribute to public interest, such as housing developments aligned with government sustainability goals, may qualify for exemptions. These cases require detailed proposals and approval from the relevant authorities.
Corporate Housing for Employees
Foreign companies operating in Andorra may request authorization to acquire additional units for employee accommodation, provided they demonstrate necessity and compliance with labor regulations.
Tourism Regulation Compliance
Properties intended for regulated tourist use may be considered under separate licensing frameworks, but these do not override the cap unless explicitly authorized.
Why These Restrictions Exist
Andorra’s housing market faced sharp price increases driven by speculative buying and short-term rentals. The government’s objective is clear: guarantee dignified living conditions for residents, prevent housing shortages, and promote sustainable territorial development. The law also addresses vacant housing and introduces mechanisms to monitor compliance with rental commitments.
Compliance and Authorization Process
Foreign investors must obtain prior authorization for any real estate purchase. The process involves:
- Proof of identity and legal status
- Documentation of investment purpose
- Compliance with anti-money laundering regulations
- Payment of the foreign investment tax, calculated as a percentage of the property’s value Applications for exemptions require additional documentation, including rental agreements or project plans demonstrating alignment with public interest goals.
Cultural and Economic Impact
These measures reflect Andorra’s effort to balance its role as an attractive investment destination with its responsibility to residents. While the country remains open to foreign capital, it prioritizes housing accessibility and social cohesion. The law signals a shift toward sustainable growth, ensuring that economic development does not compromise community well-being.
Closing Thought
The era of unlimited property acquisitions in Andorra is over. Foreign investors must now navigate a framework that emphasizes fairness and sustainability. For those willing to adapt—through affordable rental commitments or public-interest projects—opportunities remain, but within clear legal boundaries.
See more on ANDORRA
Sources
El Govern aprova el Projecte de llei per al creixement sostenible i el dret a l’habitatge
https://www.govern.ad/ca/w/el-govern-aprova-el-projecte-de-llei-per-al-creixement-sostenible-i-el-dret-a-l-habitatge-1
July 29, 2024
El Govern aprova un nou Reglament d’inversió estrangera
https://www.govern.ad/ca/w/govern-aprova-un-nou-reglament-inversio-estrangera
April 9, 2025