Mountain Tax Haven And A Record Property Price Rise
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Finance > Real Estate
May 24, 2007
Tribune2
Mountain Tax Haven And A Record Property Price Rise
Andorra, a small independent country and European tax haven in the Pyrenees, saw real estate prices rise in value by 19.3 per cent last year, and one local travel guide thinks that another rise in prices is likely in the year ahead. Best known for her ski resorts, Andorra attracts nearly ten million tourists a year, but it's not just the holiday makers who are falling in love with the country and buying second homes that is fuelling the price rises, the guide says. 'Quite a few tourists do like Andorra enough to buy a ski apartment, and there is an active local market too. But what really pushes the prices up is that there's a third stream of buyers, people from around the world who want to take residency and benefit from Andorra's tax haven status.' Property currently for sale in Andorra include one bedroom apartments at 210,000 Euros, two bedroom apartments in Soldeu, the main skiing area of Andorra, at 272,000 Euros and 280,000 Euros in another ski village Arinsal, and three bedroom apartments in the capital Andorra la Vella at 333,000 Euros. Houses start from around 900,000 Euros. Andorra property specialists have also noticed an increase in buyers recently, and comment that a large part of the increase in buyers is the increased attention from potential overseas property buyers in the UK. 'The number of buyers from the UK has increased quite noticeably over the last couple of years', they say, 'With many quoting higher taxes in the UK as their reason for moving to Andorra. Most seemed convinced that the tax take from their earnings will rise more in the years ahead, and are planning for retirement and selling their businesses now'. They also comment that historically tax havens have been popular no matter how the economy is. When someone buys a property in Monaco it often doesn't matter to them if it's a few hundred thousand Euros as they're going to save more than that in tax during the time they are resident in Andorra. Real Estate Price Increases Demand for property in Andorra for the year ahead is every bit as high as in the past claim local estate agents, with many potential buyers already having planned visits. Surprisingly perhaps for a tax haven, mortgages for a property are as available as many European countries, with rates around the same level. Up to eighty per cent of a property's value is often agreed by the banks in Andorra. 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. 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 Andorra 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.'
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