Andorra’s government offers 10% grants and tax exemptions in exchange for affordable rents for 15 years

The government has presented a bill to encourage the construction and renovation of privately owned homes that would be offered at affordable rents for at least 15 years.

The initiative, presented by Minister Conxita Marsol following the Council of Ministers meeting, combines direct grants, tax exemptions, preferential financing and planning incentives, in cooperation with parish councils.

The programme would have a two-year application window once the law is passed and would be open to private individuals and legal entities. 

El Govern presenta un projecte de llei d’incentius fiscals per impulsar l’oferta d’habitatge de lloguer assequible a Andorra pic.twitter.com/OyVsfSvfu0

— La Veu Lliure (@laveulliure) September 23, 2026

It would cover new apartment developments, building renovations, conversions to residential accommodation and changes of use that bring additional homes onto the affordable rental market.

Marsol argued that public and private efforts must come together to provide a structural response to the housing problem. She also stressed that parish councils’ participation is essential to make the programme’s terms attractive to property owners and investors.

A 10% grant and government-backed loans

Direct support would consist of a grant covering 10% of documented construction costs, calculated on a maximum eligible cost of €2,400 per square metre. This would put the maximum grant at €240 per square metre.

According to the minister, an agreement has also been reached with banks to provide financing at Euribor plus a 0% margin, secured by a mortgage, for terms of up to 25 years. The programme provides for a government guarantee of up to 100% over that period.

It would also include protection against unpaid rent, covering up to six months of payments. Marsol explained that landlords would have to file the corresponding legal claim and repay any amounts advanced by the government if they subsequently recover the money.

Participating projects would also receive priority processing for applications to the Renova programme.

Regarding penalties, Marsol suggested that fines could range from €3,000 to €10,000, depending on the seriousness of the breach. However, she acknowledged that she did not have the exact figures available at the time and said further details would be provided.

National and parish tax exemptions

A central element of the proposal is a reduction in the tax burden, conditional on keeping the homes within the affordable rental programme. 

At parish level, Marsol announced exemptions from construction fees, building permit fees and construction tax. Participating properties would also be exempt from taxes on rental income and property ownership throughout the 15-year commitment.

The parish component of property transfer tax (ITP) would also be reduced to zero for purchases of land intended for buildings that meet the programme’s conditions.

As for national taxes, the minister explained that income generated by participating homes would be exempt from corporate income tax, personal income tax or non-resident income tax, as applicable.

The bill also provides for a 0% rate of Andorra’s general indirect tax (IGI) on transactions linked to the programme, including construction materials, according to Marsol’s explanation. Purchases of eligible land would also be exempt from the national component of property transfer tax.

Exemption from development contributions and measures to facilitate permits

In planning terms, the programme would be limited to consolidated urban land and certain development units under direct management.

Participating owners would be exempt from the required financial development contribution. Projects covered by the programme would also be exempt from any temporary suspensions on the granting of building permits imposed by parish councils.

Marsol highlighted that the initiative follows months of work with parish authorities and recalled that the programme had already been discussed at the meeting of parish mayors held in La Massana on 30 June.

The central condition underpinning all these incentives would be a commitment to keep the homes available at affordable rents for at least 15 years. 

The government has approved the proposal as a bill, which must complete the parliamentary process before the programme can become operational.