Andorra's Omnibus 2 Law in 2026: The €1M Passive Residency Threshold, the €800K Property Minimum, and Why Alpine Wealth Movers Have Fewer Options Than They Think

Published on: May 9, 2026

Quick answer: Andorra's January 2026 Omnibus 2 law (effective February 13, 2026) nearly doubled the passive-residency entry bar, from €600,000 to €1,000,000, set an €800,000 minimum value on any single qualifying property, and added a new foreign investment tax of 6% on a first property and 10% on subsequent ones, pushing all-in first-purchase transaction costs to roughly 11–12%. Passive residency also requires a €50,000 non-refundable AFA contribution and just 90 days a year on the ground. The post-residency tax profile remains competitive (10% income-tax cap, no wealth or inheritance tax), and with Monaco capacity-bound, Liechtenstein effectively closed, and Switzerland tightening Lex Koller, Andorra is now the only structured Western European microstate residency option at this capital level, best suited to buyers with €2–10M liquid net worth.

The Principality of Andorra has been Europe's quietest tax haven for two decades, a 468-square-kilometer microstate between France and Spain with a 10% top income tax rate, no wealth tax, no inheritance tax, full access to the Schengen border crossings, and one of the highest GDP-per-capita figures in Europe. For wealthy individuals priced out of Monaco or unable to clear Switzerland's Lex Koller hurdles, Andorra was the realistic third option.

In January 2026, the Andorran Parliament approved the Llei de continuïtat i consolidació de les mesures per al creixement sostenible, informally known as Omnibus 2, and the passive residency entry bar nearly doubled. The standard investment threshold rose from €600,000 to €1,000,000. The minimum property value qualifying toward that threshold climbed to €800,000 per unit. A new foreign investment tax (impost a la inversió estrangera immobiliària) stacked 6% on first property purchases and 10% on subsequent properties. The law took effect on February 13, 2026.

Andorra is no longer the cheap option. It is now the only structured option, and that distinction matters.

What Omnibus 2 Actually Changed

The law consolidates regulatory drift from 2022 through 2025 into a coherent multi-year framework aligned with Andorra's sustainable population planning through 2030. The headline numbers are straightforward.

Passive residency (residència passiva), for individuals living in Andorra without working locally, now requires:

• A minimum total investment of €1,000,000 in Andorran assets, to be made within the first six months of residency approval.
• If invested in real estate, the minimum value of any single property unit counted toward the threshold is €800,000. The remaining balance up to €1M can be allocated to Andorran government bonds, debt instruments, shares in Andorran companies, life insurance products denominated through Andorran institutions, or contributions to the Andorran Financial Authority (AFA) regulatory framework.
• A non-refundable contribution of €50,000 to the AFA, replacing the prior refundable deposit structure.
• An alternative pathway: a €400,000 commitment to the Andorran Housing Fund (Fons d'Habitatge), positioned as a lower-bar option supporting affordable housing development. Whether this is a permanent capital contribution or a deposit returnable at residency exit remains practically ambiguous in the law's first months of operation.
• Minimum physical presence in Andorra of 90 days per year, the lowest of any major European residency-by-investment program.

Active residency (residència activa), for those running an Andorran company or working locally, operates under a separate framework with company formation requirements, a €50,000 AFA contribution, and a higher 183-day physical presence threshold.

Population and residency quotas are now embedded in a multi-year planning framework. Annual caps are linked to housing stock availability, infrastructure capacity, and labor market data rather than set arbitrarily, which gives applicants more predictability but also creates harder ceilings in years where Andorran housing inventory is tight.

The Foreign Investment Tax Stack

Layered on top of the residency thresholds, Omnibus 2 formalized the impost a la inversió estrangera immobiliària, a tax specifically targeting non-resident foreign property purchases. The structure is:

• 6% on the first property purchased by a foreign buyer.
• 10% on every subsequent property purchase.

This sits in addition to the existing transaction stack:

• ITP (Impost de Transmissions Patrimonials) at roughly 4%
• Notary and registration fees, ~1–2%
• Mandatory foreign investment authorization (~€300, separate procedural document, taking up to two months to issue)
• Legal counsel, typically 1%

The all-in transaction cost on a first €800,000 property purchase by a foreigner thus runs approximately 11–12%. A second property purchase pushes the all-in to 15–16%. This is a deliberate disincentive against portfolio-building by individual foreign investors and a structural redirect toward primary-residence acquisition only.

For comparison: France's frais de notaire stack to 7–8%, Spain's transaction stack to 10–12%, Germany's to 12%, and the UK with full SDLT surcharges to 14.7% on a £2M London buy. Andorra's foreign-buyer first-property stack is competitive with these, but the second-property tier makes Andorra one of the most expensive jurisdictions in Europe for portfolio expansion.

The Tax Profile That Still Justifies the Bar

Despite the higher entry cost, the operating tax profile post-residency remains competitive.

Personal income tax caps at 10% on Andorran-sourced income, applied progressively, with effective rates considerably lower for moderate income levels. Compare against Monaco's 0% (but with no equivalent residency-by-investment structure), Switzerland's 22–45% (cantonal variation), Italy's €300,000 flat tax (post-January 2026 increase), or Portugal's IFICI 20% on tech/science profiles.

No wealth tax. Spain's Patrimonio applies up to 3.5%. France's IFI hits real estate above €1.3M. Switzerland's cantonal wealth taxes can reach 1%+ annually. Andorra: zero.

No inheritance tax. Spain charges up to 34% in some autonomous communities. France stacks to 60% on non-direct heirs. Andorra: zero.

Capital gains on shares and securities held for more than 10 years are exempt from Andorran tax. Capital gains on Andorran real estate follow a degressive schedule favoring long-term holders.

Schengen access is unrestricted for residents, Andorra is not formally Schengen but operates within open borders to Spain and France, with expedited Schengen visa issuance for residents (typically 1 day) and similarly accelerated US, UK, and Canadian visa processing.

For an individual with €5M+ in liquid wealth, the math on the new €1M Andorran entry recovers within a few years against any of the comparison jurisdictions. For someone with €1–2M, it does not, and Omnibus 2 was deliberately calibrated to filter the latter category out.

The Microstate Comparison: Monaco, Liechtenstein, Switzerland

Andorra's competitive position depends on what its actual alternatives are. The honest map of Western European microstate residency in 2026 is sparse.

Monaco, no income tax for most residents, has an effective entry bar dramatically higher than Andorra's nominal €1M. The Principality requires demonstrated financial means (typically €500K+ deposited in a Monaco bank), proof of accommodation, and most importantly available accommodation, which on a 2-square-kilometer territory with median apartment prices exceeding €50,000 per square meter means a realistic minimum capital allocation of €3–5M before residency is even practical. Monaco is structurally capacity-bound; it is not an alternative for the marginal Andorran candidate.

Liechtenstein operates a quota-based residency system that admits roughly 75 third-country nationals annually across all categories combined, and effectively zero through investment-only routes. The Principality is closed in practice.

Switzerland operates the lump-sum taxation regime (forfait fiscal) for high-net-worth foreigners in cantons that still permit it (Vaud, Valais, Geneva, and several others), but the property purchase route is independently constrained by Lex Koller, Switzerland approves only 1,500 holiday-home purchases by foreigners per year nationally, and the Federal Council's April 2026 proposal to tighten Lex Koller further (public consultation runs through July 15, 2026) narrows this option additionally.

San Marino offers limited residency through the residenza elettiva, but the program is small-scale, processing times are unpredictable, and the country lacks Andorra's financial infrastructure for managed wealth.

In this landscape, Andorra at €1M is not cheap. It is simply the only Western European microstate where the structured pathway functions at this capital level. For wealth movers in the €2–10M liquid net worth band, it remains the realistic anchor.

The Geographic Reality Inside Andorra

Andorra has seven parishes (parròquies), and the property market within them is small enough that listings churn matters. The two parishes capturing the bulk of qualifying foreign acquisitions are:

Andorra la Vella and Escaldes-Engordany, the central capital corridor, concentrate the higher-end apartment and townhouse stock, with prime €/m² ranges supporting €800K-plus single-unit valuations naturally. These are the most liquid resale markets and the most accessible to high-end professional services (law, banking, tax structuring). For passive residents who plan to spend the 90-day annual minimum here without making it a primary lifestyle, this corridor is the default.

La Massana, closer to the Vallnord ski area, is the dominant foreign acquisition target for buyers prioritizing alpine lifestyle. Chalets and high-end apartments cluster here. Resale liquidity is thinner than the capital corridor but improves materially in winter season.

The remaining parishes, Encamp, Canillo, Ordino, Sant Julià de Lòria, host smaller markets with limited inventory at the €800K+ threshold and should be approached as lifestyle purchases rather than liquidity-optimized investments. Ordino in particular has become a high-end residential pocket but has tight inventory.

The €800K minimum property valuation rule is a binding constraint in some parishes. A foreign buyer cannot acquire two €400K apartments and aggregate them toward residency qualification, each unit must independently clear €800K. This pushes the qualifying universe into a relatively narrow segment of the Andorran market and concentrates demand in the higher tiers of capital-corridor and La Massana stock.

Who This Works For, and Who It Doesn't

The 2026 Andorran framework cleanly suits one buyer profile: an individual with €2–10M liquid net worth, ongoing income that can be partially routed through Andorran tax residency, willingness to spend 90+ days annually in the country, and a multi-year (5–10 year) horizon on the residency itself. For this profile, the all-in entry cost (€1M investment + ~€100K transaction stack + €50K AFA contribution) recovers in tax savings against most European comparisons within 3–5 years.

It does not work for:

• Buyers below €2M liquid net worth (the entry bar is now too high relative to total wealth).
• Digital nomads who cannot physically commit to 90 days in Andorra annually.
• Buyers seeking pure investment exposure without lifestyle integration.
• Investors planning portfolio acquisitions of multiple Andorran properties, the 10% second-property tax makes this structurally uneconomic.

The Omnibus 2 adjustments specifically targeted these categories. Andorra is repositioning as an exclusive residence jurisdiction, not a passive investment vehicle.

The Verdict for 2026

Andorra in 2026 is more expensive, more selective, and structurally more aligned with sustainable population planning than at any point in the last decade. The €1M threshold and €800K property minimum represent a deliberate filter against the casual-buyer category that drove regulatory pressure between 2020 and 2024.

For wealth movers with the capital to clear the bar, the post-residency tax profile remains one of Europe's best, and the alternatives have narrowed, not widened:

• Monaco is capacity-bound.
• Liechtenstein is closed.
• Switzerland is tightening.
• Italy raised its non-dom flat tax to €300K in January 2026.
• Portugal's IFICI is sector-restricted.
• Greece tripled its Golden Visa price tiers.
• Spain's Golden Visa ended in April 2025.

In a year when most European wealth-friendly jurisdictions tightened, Andorra also tightened, but it remained open, and that distinction is the entire point. The principality is not the cheapest option in 2026. It is the only structured one for a recognizable slice of the global wealth-movement market.

For cross-border investors mapping Western European residency, the question in 2026 is no longer whether Andorra makes sense at €600K, it doesn't exist at that price anymore, but whether €1M, properly structured, still beats the alternatives.

For the right buyer profile, the answer remains yes. For everyone else, Omnibus 2 was the goodbye.

Frequently asked questions

How much do you now need for passive residency in Andorra?
Under Omnibus 2, the standard passive-residency investment threshold is €1,000,000 (up from €600,000), to be invested in Andorran assets within the first six months of approval, plus a €50,000 non-refundable contribution to the AFA. If invested in real estate, any single property unit counted toward the threshold must be valued at €800,000 or more.

What is the new foreign property investment tax?
The impost a la inversió estrangera immobiliària charges 6% on a foreign buyer's first property purchase and 10% on every subsequent property, on top of the existing stack (roughly 4% ITP, notary and registration fees, and legal counsel), bringing all-in costs to about 11–12% on a first purchase and 15–16% on a second.

How many days a year must you spend in Andorra?
Passive residency requires a minimum physical presence of 90 days per year, the lowest of any major European residency-by-investment program. Active residency (running an Andorran company or working locally) carries a higher 183-day threshold.

Why is Andorra described as the "only structured option" rather than the cheapest?
Because the alternatives have narrowed: Monaco is capacity-bound with an effective entry of roughly €3–5M, Liechtenstein's quota system is closed in practice, and Switzerland is tightening Lex Koller. At €1M, Andorra is no longer cheap, but it is the only Western European microstate where the structured pathway still functions at this capital level.

JanusHermes provides cross-border real estate intelligence across Andorra and 50+ countries, including residency-by-investment threshold comparisons and country-by-country tax frameworks for international investors. Explore the Country Intelligence tool for Andorra or browse current listings.

This article is for informational purposes only and does not constitute legal, tax, or investment advice. Omnibus 2 thresholds, AFA contribution rules, foreign investment tax tiers, and the Fons d'Habitatge alternative pathway are subject to ongoing regulatory interpretation in the law's first year of operation. Buyers should obtain confirmation in writing from a qualified Andorran advocat and gestor before relying on any specific structure.

A note on the numbers: where no source is named, the market figures in this article (prices, yields, costs) are indicative estimates compiled from publicly available market data and industry reporting at the time of writing. Markets move and rules change, so treat them as a starting point and verify current figures with official sources before acting on them.