Tuesday, September 5th 2023
Today in an extraordinary session, The Council of Ministers approved a proposal by the Minister for Presidency, Economy, Labor and Housing, Conxita Marsol, a transitory suspension of authorizations for foreign investment in real estate. The measure will be immediately undertaken with aim of it being debated and voted on in Parliament next Thursday, September 7th.
In the face of a strong increase in foreign investment in real estate in Andorra and in order to guarantee sustainable growth, the Government, while complying with one of the political campaign´s main promises, also plans to revert directly to the State these investments economic capacity through a tax on foreign investment in real estate. While the law is still to be passed, and so as to avoid a rush by potential investors during this procedural impasse, the Government has opted to present the Draft of Law this Tuesday regarding the suspension of foreign investment in real estate in the Principality of Andorra, and for it to be undertaken -in accordance with Article 60.1 of the Constitution- with extreme urgency and need. The aim is to disincentivize sales which contribute to speculation.
This was highlighted by the head of Government, Xavier Espot, who appeared at the press conference alongside the Minister Conxita Marsol. Moreover, the Minister for Presidency, Economy, Labor and Housing, presented the moratorium as a punctual measure that will contribute to facing the affordable rental housing crisis that the country is going through, and as a necessary first step to the implementing of a tax on foreign investment in real estate during set to be ready in the autumn.
The Government plans to impose a tax on foreign investment in real estate that will be intended to foment measures benefiting citizens such as infrastructures, economic diversification projects or increasing public investment in rental units. It will simultaneously create a tax on foreign investors who decide to uninvest in Andorra before a set period of time.
While the tax is being fixed, the will is to Update the Law on Foreign Investment and present it during the first quarter of 2024. The Government has communicated the measure to the parliamentary groups, and to whom they have extended a hand for them to contribute to the modification of the foreign investment law. In this sense, Xavier Espot explained that they opted to adopt the moratorium until the tax that foreigners who wish to invest in real estate will have to pay is defined and, simultaneously work on a modification of the Law through a participatory and plural project.
The Head of the Government took the opportunity to call on collaboration and a sense of State from the Town councils in order to obtain studies on volume capacity which will provide the information necessary to establish the limits in terms of real estate construction and guarantee the country´s sustainability.
Text and photo: Govern d’Andorra
