A real estate purchase in Andorra and a real estate purchase in France cannot be compared solely on the price per square meter. Both countries apply distinct legal, tax, and banking regimes that alter the actual acquisition cost, the rights of foreign buyers, and resale constraints. Understanding these differences requires examining each mechanism separately before comparing them.
Tax on foreign investment: a specific cost in Andorra
France does not levy any specific tax related to the nationality of the buyer. A French tax resident and a foreign buyer pay the same transfer duties, around the same rate, without any increase.
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Andorra operates differently. A progressive tax on foreign real estate investment is added to the standard transfer duties. Its rate varies depending on the number of properties already owned and their nature. For a first apartment purchased by a non-resident, the tax surcharge can reach several percentage points of the purchase price. This tax does not disappear if the buyer subsequently obtains Andorran residency.
Before committing, it is essential to compare a purchase in Andorra and in France by including this item, which is often absent from quick simulations.
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Quotas and purchase restrictions in Andorra versus the freedom to acquire in France
French law allows anyone, regardless of nationality or residency status, to purchase real estate. The Ministry of Justice reaffirmed this position in August 2025: no nationality restriction limits the right to buy in France, including for a foreigner without a residence permit.
Andorra has taken the opposite direction. The Omnibus law now regulates acquisitions by non-residents through a quota system.
- A non-resident can only purchase a maximum of one chalet or two apartments in Andorra.
- New real estate developments must offer at least 50% of affordable housing to be authorized.
- An investment authorization for foreign buyers issued by the Andorran government remains mandatory before any notarized signature.
These constraints respond to the price surge caused by the influx of foreign buyers. The French market, despite its tight areas, imposes neither a quota of properties per buyer nor a requirement for affordable housing in private programs.
Transfer duties and notary fees: two different cost structures
In France, transfer duties for an old property are around 7 to 8% of the sale price (including the notary’s fee, departmental and municipal taxes). For a new property, this rate drops significantly.
In Andorra, the property transfer tax (ITP) is set at 4%. This rate seems lower, but the tax on foreign investment for non-residents must be added, which can bring the total well above the French scale depending on the buyer’s profile.
The actual entry cost depends on the buyer’s residency status, not the displayed nominal rate. An Andorran tax resident for more than three years avoids the foreign surcharge and benefits from a significantly lower acquisition cost than in France. A non-resident buying their second property in Andorra may find themselves facing comparable or even higher fees.
Bank financing: diverging borrowing conditions
Andorran banks lend to tax residents up to about 80% of the property’s value. For a non-resident, the loan-to-value ratio decreases, and the lending conditions become stricter (higher down payment, additional guarantees).
In France, banks regularly finance between 80 and 100% of the purchase price for residents. A non-resident buyer can obtain a mortgage in France, but institutions generally require declared income in the territory or specific guarantees (pledge, enhanced mortgage).
The main difference lies in the maturity of the credit market. The French banking system offers long loan terms (20 to 25 years) with rates regulated by HCSF rules. The Andorran market, being more limited, offers terms and rates that vary more from one institution to another, with less competition among lenders.
Personal contribution as a decisive variable
In both countries, the personal contribution determines the feasibility of the project. In Andorra, a non-resident often has to cover the entire purchase price plus taxes without resorting to local credit, which steers the market towards buyers with high available capital. In France, bank leverage remains accessible to a broader range of profiles.
Taxation on resale: capital gains and taxation compared
The resale of a property in Andorra generates taxation on capital gains, with the rate decreasing with the holding period. Complete exemption from capital gains tax in Andorra occurs after a relatively short holding period compared to the French regime, where complete exemption from income tax only occurs after 22 years of holding (and 30 years for social contributions).
This parameter changes the investment strategy. A buyer planning to resell in the medium term has a net tax advantage in Andorra. A buyer holding their property for the very long term will see the gap gradually narrow.
The choice between the two countries is not limited to a comparative table of rates. Residency status, the number of properties already owned, the capacity for contribution, and the holding horizon modify each line of the calculation.
A wealthy non-resident targeting a pied-à-terre will find in Andorra a light holding tax but regulated access. A first-time buyer with a modest contribution will have more banking leverage in France, with a heavier tax cost on exit in the medium term.