The Council of Ministers, in an extraordinary meeting today, approved the temporary suspension of permits for foreign investment in real estate, on the proposal of the Minister of the Presidency, Economy, Employment and Housing, Conxita Marsol. The measure will be dealt with immediately so that it can be debated and voted on in the General Council on Thursday, September 7th

In view of the sharp increase in foreign investment in real estate in Andorra, and in order to ensure sustainable growth, the Government has also committed itself, in accordance with an important point of its electoral programme, to returning the economic capacity of this foreign investment directly to the State through a tax that will soon be levied on foreign investment in real estate. Pending this milestone, and in order to prevent potential investors from crying foul in this regulatory impasse, the Government has opted for the formula of presenting this Tuesday the bill to suspend foreign investment in real estate in the Principality of Andorra, which – in accordance with Article 60.1 of the Constitution – is considered a matter of extreme urgency and necessity. The aim is to prevent speculative buying and selling. 

This was stressed by the Head of Government, Xavier Espot, who appeared before the media together with Minister Conxita Marsol. 

At the same time, the Minister of the Presidency, Economy, Employment and Housing described the moratorium as a one-off measure that will help solve the problem of the lack of affordable rental housing in the country and as a necessary precursor to the introduction of a tax on foreign investment in property this autumn. 

The Government plans to introduce a tax on foreign investment in real estate, which will be used to promote measures that benefit citizens, such as infrastructure, economic diversification projects and increasing the public rental housing stock. At the same time, it will seek to introduce a tax on foreign investors who stop investing in Andorra before a certain period has elapsed.

While the tax is being assessed, the intention is to work on updating the Foreign Investment Law and present it in the first quarter of 2024. The government has communicated the measure to the parliamentary groups, offering them an open hand to collect contributions for the revision of the Foreign Investment Law. In this context, Xavier Espot explained that it had been decided to adopt the moratorium while the tax to be paid by foreigners wishing to invest in real estate was still to be determined, and in parallel to work on amending the law as part of a participatory and pluralist project. 

The Head of Government took advantage of his appearance to appeal for the cooperation and understanding of the people in order to obtain the carrying capacity studies that will make it possible to know the limits that must be set with regard to property construction in order to guarantee the country’s sustainability.  Official source: https://www.govern.ad/altres-noticies/item/15915-el-govern-anuncia-una-suspensio-transitoria-de-les-autoritzacions-d-inversio-estrangera-en-immobles