THE PRINCIPALITY of Andorra is taking action to combat property speculation and is banning foreigners from buying property in a bid to battle soaring prices.
Given runaway prices in the microstate, which is located between France and Spain, the government has decreed this temporary moratorium until a new tax can be introduced.
Finding a place to live did not used to be a problem in Andorra, according to a report in Spanish daily El Diario. But recently it has become an impossible mission for many of the 84,000 inhabitants given a speculative boom in the property market.
“We are faced with a real estate epidemic,” Cerni Escale, the leader of the political opposition, told the newspaper. “Some citizens are leaving the country because they can’t permit themselves the luxury of living here any more.”
Between the last quarter of 2022 and the first quarter of 2023, property prices have risen in Andorra by 12.8%, with estimates that more than €1 billion of foreign capital has been invested in real estate in the principality.
The moratorium on foreign buyers was put into place by the government at the start of this month, until a tax on such purposes can be introduced.
The government has stated that the revenues from this levy will go toward building affordable housing for residents.
The idea of the moratorium, said the government head Xavier Espot, is to avoid a rush on property purchases before the tax can come into force.
According to El Diario, there has never been so much construction in Andorra but at the same time it has never been more difficult to access housing.
Estimates say that there are around 3,000 empty apartments owned by foreign investors.
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