While Much Of Europe Edges Towards A Property Recession, The Tax Haven Of Andorra Appears To Be Bucking The Trend

Category: Finance, Real Estate.

While much of Europe edges towards a property recession, the tax haven of Andorra appears to be bucking the trend.

Andorra is a ski country as well as a tax haven, and traditionally the year gets off to a flying start with many serious skiers looking for a holiday home buying an apartment or house. Signs early this year were not good, with few buyers around. But this year proved to be different, with the worst snow falls for twenty years and a distinct lack of tourists who would normally be considering whether to buy a ski apartment. This year Andorra opened a new family friendly ski park in Arinsal, moving away from her old image of a cheap and cheerful ski holiday for 18- 30 year olds to one that caters well for all. Andorra has invested heavily in new infrastructure and facilities for the ski tourist in recent years, which would make a second successive poor season particularly hard to bear for the country s ski tourist industry if there is a lack of snow for the 2007- 8 season as well. The snow park includes a conveyor belt and a game zone, designed to give children confidence before they ski and use the chair lifts. But the second quarter proved to be dramatically better.

With the first quarter of 2007 having no impact on property prices, the year overall looked gloomy for estate agents in Andorra for the year overall. Rather than the season being delayed, what saved the second quarter was high net worth individuals looking for residency and taking advantage of Andorra s tax haven status that has reignited the property market. One UK company who specialises in tax haven properties sees a direct link between the high prices of property in the other European tax haven of Monaco, and the high spenders moving into Andorra. Buyers from the UK in particular were out in force during April, with many spending, May and June twice as much as the average ski apartment buyer. Monaco property prices have risen in recent years to the extent where it challenges London for having the most expensive real estate in the world. A studio apartment with 43m2 of living space has just come on the market in Monaco at 1, 000 Euros, 150, while a 2 bedroom apartment with 100m2 can be bought in Andorra for under 400, 000 Euros.

Andorra has consistently seen double digit property inflation, but is still considerably less expensive than Monaco. With similar tax benefits, the UK company says that some buyers who initially consider Monaco end up buying in Andorra. Some Monaco property buyers who buy in Andorra also buy a four or five bedroom chalet with its own gardens, which start at just under a million Euros in Andorra. The buyers have often budgeted a million Euros for a 2 bedroom apartment for Monaco, and are happy to pay half that price for a much larger apartment in a good area of Andorra, with top end apartments in Andorra turning over quickly to foreign buyers. The property buyers tend to head for different areas of Andorra, with the ski apartment buyers tending to purchase in the key ski resorts of Soldeu and Arinsal. Outside of the capital( la Vella) these tend to be La Massana and the upcoming village of Anyos, although Arinsal, Ordino and Arinsal s nightlife during the ski season early December to late April tends to steer many newcomers to La Massana and Ordino.

Those looking for residency go more for the year round villages and towns which have a resident community.

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