Tax Haven Property 2007 Gets An Icy Chill
Keywords: Andorra, Andorra ski holidays, flights to Andorra, real estate, property, vacation homes, tax
Property prices in Andorra, second only to Monaco in popularity among Europe’s tax havens, have risen consistently over the last decade by an average of ten per cent a year, and in the last two years by over fifteen per cent.
But a lack of snow and tourists in December and January has stopped the rise in its tracks, according to Andorra property specialists.
‘We normally seen an influx of buyers from the first week of December through to mid April who want to buy ski apartments, but it has been very slow this year,’ they comment, adding ‘It’s been an unusual ski season as there was next to no snow between December and mid January. A lot of tourists, some of whom end up buying a property in Andorra, have delayed their visit or gone elsewhere. We anticipated February and March to be a busier sales period but it didn’t really happen.’
Andorra has unusually high demand for property as there are three streams of buyers:
An active local market, international buyers looking for residency in a tax haven that offers residents a zero rated tax rate, and second home buyers looking for a ski property in the Pyrenees.
And it is the second home buyers, mainly for ski properties, that has seen the Andorra property market stopped in its tracks - for the first part of 2007 at least.
One of the highest rises in recent years was the 19 per cent increase in property values in 2005, with the 2006 increase not far behind at around 15 per cent.
Andorra Residency
As well as being a top ski destination, Andorra is also a tax haven, with many people moving to the country to benefit from her income tax free status.
Buying a property in Andorra is often seen as a route to residency, which entitles people to live in Andorra and benefit from her tax haven status.
To obtain residency in Andorra, applications need to be submitted in Catalan. A notarised copy of the applicants passport, birth certificate and a certificate of good conduct from the home country are submitted at the same time. According to a local travel guide residency normally takes between three and six months to be approved.
Once residency is granted, residents are supposed to spend six months a year in Andorra, but this isn’t policed.
One of the drawbacks for those looking to become a resident in a tax haven when considering Andorra has been that the country has no airport of its own, and is unlikely to have ine future given that it is located in the Pyrenees. The nearest airports are Barcelona and Toulouse.
Recent improvements in the road from Barcelona to Andorra though have cut the travelling time by some thirty minutes to two hours fifteen minutes.
‘Given the tax advantages Andorra has’, note the travel guide, ‘A two and a quarter hour trip to the nearest international airport could be viewed as a small price to pay for those who will be saving substantial amounts of money in tax. Especially when you consider that their properties could be rising in value quite significantly in the years to come, and for those who like skiing it’s a holiday and tax paradise in one!’
Tribune Properties produce a guide for Andorra at www.yourandorra.com
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