Andorra's Government Denies Local Councils Can Apply Housing Law “À La Carte”

Andorra's government spokesperson, Guillem Casal, defended on Wednesday the agreement reached between the government and the country's local councils over the proposed affordable housing incentives law, rejecting suggestions that parish authorities would be free to implement the measures entirely at their own discretion.

His comments came after local council leaders confirmed on Tuesday that an agreement had been reached to introduce greater flexibility in the application of housing incentives, with the aim of preserving local government autonomy.

Casal insisted that the proposed legislation establishes common principles for all seven parishes, although it allows different levels of implementation for certain tax reductions.

“I think we need to move away from the idea that there is a possibility of applying this law à la carte,” the minister stated.

The clarification comes as Andorra continues to debate measures intended to address its housing affordability crisis, particularly the shortage of affordable rental properties and the role of local authorities in encouraging new residential development.

Local Councils Will Be Able to Set Tax Reductions Within Legal Limits

According to Casal, the proposed legislation will establish defined ranges of tax incentives, allowing Andorra's parish councils, known as comuns, to adapt certain measures to their local circumstances.

However, these decisions will have to remain within the boundaries established by national legislation.

As an example, the minister referred to the tenancy tax, for which the proposed framework would allow reductions ranging from 0% to a legally established maximum.

Each local council would therefore be able to determine the percentage of the tax reduction it wishes to apply, provided that its decision remains within the limits set by the law.

“There is no framework that can be applied à la carte. What exists is a degree of flexibility, but controlled and clearly defined flexibility,” Casal emphasised.

The government argues that this arrangement will help reconcile two objectives: respecting the autonomy of Andorra's local authorities and encouraging the development of more affordable housing.

Under the proposed system, parish councils would retain some flexibility over the level of certain financial incentives without being able to disregard the overall legal framework.

Government Clarification Contrasts With Earlier Statements by Parish Leaders

Casal's explanation introduces an important distinction compared with statements made on Tuesday by Cerni Cairat, Mayor of Sant Julià de Lòria, who indicated that the measures would be voluntary during the first two years.

Under that interpretation, local councils would be able to decide whether to incorporate certain incentives into their urban planning and taxation policies.

However, Casal emphasised that the decisions available to local authorities would be defined by the proposed legislation, which will establish both the general principles and the permitted ranges of tax reductions.

During his remarks, the minister did not specify exactly how the two-year voluntary period announced by parish leaders would be incorporated into the final legal framework.

Nevertheless, he insisted that the legislation would not allow local authorities to freely choose which legal provisions to comply with.

This distinction is particularly relevant because the possibility of applying a 0% tax reduction does not necessarily mean that a local council can opt out of the entire housing law.

The precise extent of local discretion will therefore depend on the final wording of the legislation and how the proposed incentives are regulated.

Andorra's Government Highlights Agreement With All Seven Parishes

Casal also stressed that negotiations between the central government and the parish councils had helped resolve earlier disagreements over the proposed legislation.

“Above all, I think it is important to recognise that an agreement has been reached,” he stated.

The minister noted that both levels of government share the objective of increasing the supply of affordable housing in Andorra, even if differences had emerged over how individual incentives should be implemented.

According to Casal, the last two meetings between the government and local representatives allowed several aspects of the legislative proposal to be clarified, particularly concerning the decision-making powers of parish councils.

The agreement is intended to provide a degree of local flexibility without undermining the overall purpose of the affordable housing law.

For the government, the challenge is to establish a common national framework capable of supporting housing development while recognising the different circumstances and priorities of Andorra's seven parishes.

The final legislative provisions will be crucial in determining how this balance operates in practice and whether the new incentives can contribute to expanding the country's affordable housing supply.