Andorra’s tax appeal is real and it is simple: no wealth tax, no inheritance tax, no gift tax, and income tax that tops out at 10%. The complication is the entry tax on foreign property purchases, which is where a relocating buyer needs precision rather than the “up to 10% on foreigners” headline. This guide separates the clean benefits from the one real cost, and sets out what you pay to buy, to own, to earn and to sell.
Income tax ceiling
Wealth, inheritance and gift tax
Every figure cited to primary sources
Among Europe’s lowest
Last updated: 22 July 2026
By: Alexander Thornbury
What taxes does Andorra actually have?
Start with what it does not have, because that is the headline and it holds up. Andorra levies no wealth tax, no inheritance tax and no gift tax. For a UHNWI used to an annual wealth charge and a 40%-plus estate tax elsewhere in Europe, that alone is the draw. Income tax exists but is gentle, with a top rate of 10%, and the general consumption tax, IGI, is 4.5%, among the lowest in Europe. Corporate tax is 10%.
The one significant cost is not a recurring tax at all. It is the entry tax on foreign property purchases, the Foreign Investment Tax, and the ownership cap that sits alongside it. Everything else in the Andorran system is designed to be light. This one item is designed to steer foreign money toward genuine relocation and away from speculation, and it is the part a buyer must understand precisely.
| Tax | Andorra | Note |
|---|---|---|
| Wealth tax | None | No annual charge on net worth |
| Inheritance and gift tax | None | No estate or gift duty |
| Income tax | 10% top rate | Nothing on the first EUR 24,000 |
| IGI (consumption tax) | 4.5% | Among the lowest in Europe |
What do you pay to buy?
The purchase carries a property transfer tax on a resale of around 4%, or, on a new-build, 4.5% IGI in its place. On top of that sits the Foreign Investment Tax, which is the item that moves the total most and which the next section covers in full. Notary, registry and legal fees add a further modest layer.
One point of precision: the transfer tax is split between the national government and the parish (the comu), and the parish share varies by parish, so the exact rate depends on where you buy. Confirm the precise figure with your notary for the specific parish before you commit. The all-in cost of a purchase typically lands somewhere between 7% and 11%, dominated by the Foreign Investment Tax band that applies to you.
| Cost to buy | Charge | Note |
|---|---|---|
| Transfer tax (resale) | Around 4% (ITP) | Split national + parish; varies by parish |
| New-build instead | 4.5% IGI | In place of the transfer tax |
| Foreign Investment Tax | 6% on a single home, 10% above that | The variable that moves the total most |
| Notary, registry, legal | A modest further layer | All-in typically 7% to 11% |
The Foreign Investment Tax explained
Introduced in 2024, the Foreign Investment Tax applies to property bought with foreign capital, and it is progressive by the number of properties, not flat. A first property is taxed at 6%, rising to 10% once you go beyond a single home, applied progressively by the total number of units you hold. The rates rose in February 2026; a lot of published guidance still quotes the old 3%.
The line that matters, though, is the rebate. Where the property is your main residence or a long-term let, a 90% rebate applies, so the effective rate on a single home you move into is a full 6%. The tax is heavier on the speculator than the relocating homeowner, but the relocating homeowner still pays it. If you are assembling a portfolio it climbs to 10%, and the ownership cap will likely stop you first.
What do you pay each year?
Very little. Andorra has no annual wealth tax and no heavy recurring property tax of the kind familiar elsewhere. The local taxes that do exist, the parish charges often referred to together as foc i lloc, are set at parish level and are modest, typically a matter of tens to low hundreds of euros rather than a meaningful annual burden.
Community charges on an apartment or a managed development are a separate, private cost and can be more material on a prime building, but they are service fees, not taxes. The practical point for a UHNWI is that the annual cost of simply owning and holding a home in Andorra is low, which is part of what makes the relocate-and-stay model work. Confirm the exact parish figures locally, as they vary.
What about capital gains when you sell?
Andorra taxes the gain on a property sale on a sliding scale that falls with how long you have held the property. A sale in the first year or two carries the highest rate; the rate then tapers down over the holding period, reaching zero for long-held property. The system rewards buying to live and hold, and penalises quick resale, which fits the whole design of the market.
The precise year-by-year bands are best confirmed with an Andorran tax adviser at the point of sale, because the detail matters and the schedule is the kind of thing that is periodically adjusted. The shape, though, is stable and worth planning around: the longer you hold, the less you pay, down to nothing. For a genuine relocating owner, that is another point in Andorra’s favour rather than a cost to fear.
How does income tax work as a resident?
If you become Andorran tax-resident, personal income tax is low and banded. There is no tax on the first EUR 24,000 of income, a modest middle band above that, and a top rate of 10% on income above roughly EUR 40,000. Savings income is treated gently too, with an initial exempt amount before a 10% rate applies. There is no higher bracket waiting further up; 10% is the ceiling.
The condition, as always with Andorra, is that the benefit follows genuine tax residency, which means spending more than 183 days a year in the country or centring your economic interests there. Holding a residency permit and a home while living mostly abroad does not deliver the rates. This is the point where property, residency and tax planning have to be coordinated, and where Andorran advice earns its fee. Our residency guide covers how the permits work.
The treaty position
Andorra has built out a network of double-tax treaties over the past decade, and two of them matter most to the likely buyer: the treaties with Spain and with France, both in force since 2016. For a buyer relocating from either country, those treaties govern how income and gains are shared between the two tax authorities and are central to planning a clean move.
The network beyond those is growing but selective, and it does not cover every country. A buyer moving from a country with no Andorran treaty, the United Kingdom among them, needs to plan the exit and the arrival more carefully, because there is no treaty to allocate taxing rights and smooth the transition. Which treaty applies to you, and what it means for your specific income, is a question for a cross-border adviser before you move.
Key takeaways
- No wealth tax, no inheritance tax, no gift tax. Income tax tops out at 10%; IGI is 4.5%.
- The Foreign Investment Tax is progressive by number of units, 6% on a single home and 10% above that. A single home is taxed at a 6%; the 10% rate is portfolio territory.
- All-in purchase cost is roughly 7% to 11%, with the transfer-tax split varying by parish.
- Annual ownership taxes are very low. Community charges are a separate private cost, not a tax.
- Capital gains taper to zero the longer you hold. The system rewards buying to live, not to flip.
- The Spain and France treaties (in force 2016) are the load-bearing ones; a buyer from a no-treaty country such as the UK must plan the move more carefully.
Frequently asked questions
Does Andorra have wealth or inheritance tax?
No. Andorra levies no wealth tax, no inheritance tax and no gift tax. Income tax tops out at 10% and the consumption tax, IGI, is 4.5%.
How much tax do foreigners pay to buy property in Andorra?
A resale carries a transfer tax of around 4% (or 4.5% IGI on a new-build), plus the Foreign Investment Tax, which is 6% on a single home, rising to 10% beyond that. All-in purchase costs are typically 11% to 15%.
What is the Foreign Investment Tax in Andorra?
A tax on property bought with foreign capital, introduced in 2024 and raised in February 2026, progressive 6% on a single home and 10% beyond that, applied progressively by the number of units held. The 90% rebate is limited to affordable rental housing let for at least ten years.
Is Andorra really tax-free?
No, but it is low-tax. There is no wealth, inheritance or gift tax, and income tax caps at 10%. The main cost for a foreign buyer is the entry Foreign Investment Tax, which is small for a single relocating home.
What annual property taxes does Andorra have?
Very little. The local parish charges are modest, typically tens to low hundreds of euros. There is no annual wealth tax. Community charges on an apartment or development are a separate private service cost, not a tax.
What capital gains tax applies when I sell?
A sliding-scale gains tax that falls the longer you hold, from a higher rate in the first year or two down to zero for long-held property. Confirm the exact bands with an Andorran adviser at the point of sale.
What is the income tax rate in Andorra?
Nothing on the first EUR 24,000, a modest middle band, and a top rate of 10% above roughly EUR 40,000. Savings income has an initial exempt amount before a 10% rate. The benefit applies once you are genuinely tax-resident.
Does Andorra have a tax treaty with my country?
It has treaties with Spain and France, both in force since 2016, plus a growing but selective wider network. Some countries, including the United Kingdom, have no treaty with Andorra, which makes planning a move from there more involved. Take cross-border advice.
Do I need to live in Andorra to get the low tax rates?
Yes, effectively. The rates follow tax residency, which means more than 183 days a year in Andorra or your centre of economic interest there. Holding a permit and a home while living abroad does not deliver them.
Sources
- Govern d’Andorra – Departament de Tributs i Fronteres (income tax, IGI, property taxes, capital gains, Foreign Investment Tax)
- Butlleti Oficial del Principat d’Andorra – Llei 3/2024 (Foreign Investment Tax), Llei 5/2023 (capital gains integration)
- Govern d’Andorra – double-tax conventions (Spain and France, in force 2016)
Figures current at July 2026. Andorran tax rules changed across 2024 to 2026 and should be confirmed with an Andorran tax adviser before you buy or move.
About the author
Alexander Thornbury is a published author who writes on international property, tax and residency for high-net-worth buyers across Europe. His work focuses on the practical mechanics of cross-border purchase: what a buyer actually pays, owes and signs. More at alexanderthornbury.com.