Andorra restricts foreign investors from buying real estate to combat housing crisis.

Foreigners have been banned from buying real estate in Andorra since the government temporarily banned it because of internet celebrities and wealthy foreign investors, causing property prices to rise 30 percent over a five-year period. Andorra, a micro-state between Spain and France, is popular for its ski resorts, mild summers and convenient tax breaks, which attracts thousands of foreign investors to this "tax haven," according to SchengenVisaInfo.com. Property prices in Andorra rose 13 percent between October 2022 and March 2023, and last year the government approved about 500 applications to buy properties worth up to 183 million euros.

Foreign Investments''Banned for three months due to housing crisis

The Andorran government has banned investment from abroad for three months, which will later be replaced by a tax on all real estate purchases by foreigners. The revenue from the tax will be used to build affordable rental housing. The average price per square meter in Andorra is higher than in most parts of Barcelona and is up to 4700 euros. On the other hand, Andorrans may have trouble buying homes in their own country due to the low minimum wage of 1,300 euros, while the cost of real estate in this microstate can be three to four times the minimum wage that working locals receive on a monthly basis. Limitations''will apply to non-residents, leaving room for investors to apply for residency permits.

The ban will strengthen Catalan language requirements.

The latest ban will not only restrict investment in Andorra, but also''will make buying real estate in the country more difficult as Catalan language skills will be required to obtain residency permits in the country. From 2024, Andorran residence permit holders will have to prove they can communicate at a basic level in Catalan to renew their permits. As the country tries to preserve its language, applicants will have to take a 30-hour Catalan language course. The whole situation has sparked debate and been criticized by foreigners, with some public figures even raising questions about Andorra acting like a dictatorship.