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One night during our first visit to Andorra, we returned to the hotel late after dinner. The bar was still open, so we decided we’d have a nightcap. As the cognac level climbed up my glass, I realized the barman would continue to pour until I told him to stop. A small thing, but it seemed to symbolize the country’s hospitable attitude.  A few months of research later, we returned, bought a house in the mountains, and stayed eight years.  Apart from the accommodating barman, why did we choose to settle in Andorra? Maybe I should begin by explaining where this place is to be found. The tiny, independent Principality of Andorra (it has a seat at the U.N.) consists of 188 square miles of mountains, valleys, forests, and lakes, all shoehorned into the Pyrenees between France and Spain. The entire country is ringed with mountains. [ See Map ] In the south, the road from Spain leads into a canyon formed at the principality’s frontier by the massifs of La Rabassa on one side and those of Fontaneda and Canolich on the other. Ahead, and stretching in a half-circle across the horizon, there are dozens of majestic peaks, snow-capped for most of the year. With sonorous titles like Pic del Pla de L’Estany, Pic de la Serrera. and Pic de la Coma de Varilles, they form the western, northern, and eastern boundaries.  Total absence of serious taxes High on most foreigners’ list of reasons for living in Andorra is the total absence of serious taxes. No income, no capital gains, no inheritance taxes. Not even a sales or value-added tax. The last time Andorrans put their hands in their pockets was around the end of the 14th century when they paid dues to their feudal lords. They’re not anxious to repeat the experience.

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Ten-million visitors, most of them day-shoppers from Spain and France, pile into the country every year, buying everything from sugar, butter, olive oil, and cheese…to cameras, electronic gadgetry, sports equipment, and boutique clothing. Scotch is $8 per liter (about 2 pints) and gin costs less than $6. Cigarettes and tobacco are cheap. Perfumes and colognes cost 30% less than in airport shops where prices are laughably described as “duty-free.” 

With Andorra’s government making just about enough from the import duty to fund its budget, this is a win-win situation for everyone. 
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Although the principality has it made these days, things weren’t always so good. For centuries, its people barely managed to get by. Some were subsistence farmers, scratching a precarious living from the soil. Others, more entrepreneurial, became contrabandistes, a time-honored profession in Andorra. Using mountain trails to by-pass customs posts, Andorrans smuggled French-made goods into Spain and on the return leg, loaded up with Spanish merchandise for sale in France.  In the right place at the right time The in the 1950s, international tourism boomed. Finding themselves in the right place at the right time at last, Andorrans set about the business of parting tourists from their money. They opened hotels, restaurants, and stores. When winter sports became popular, they invested in ski lifts and built resorts. And when the visitors decided they’d like a holiday or permanent residence in the country, Andorran developers built houses and apartments for them.

A financial guru told me that he cautions his clients against changing their country of residence just to avoid tax. “Those who do,” he says, “usually throw in the towel after a couple of years. People have to understand what they’re getting into. If they don’t like the country, then they’re not going to be happy, even if there’s a big saving.” 

Truth is, Andorra has so much to offer that few people regret moving there, even though avoiding taxes may have been their original motive. For starters, it’s one of only a handful of countries in the world where the price of living in fiscal paradise doesn’t include either tropical sunburn or a permanent case of sand-in-the-shoes. If you’re the type that has to be dragged to a beach, you’ll appreciate the point. 

Downhill skiing in the Pyrenees

Andorra’s mountains are not just scenic backdrops, either. In winter, the country’s seven resorts provide some of the best downhill skiing in the Pyrenees with drops of 3,000 feet and runs of a couple of miles or more. The almost five-month season attracts over a million visitors but with high-speed chair lifts, I rarely have to queue for more than a few minutes, even at the busiest times. 
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If skiing isn’t your thing, there are plenty of other options. The country’s seven comuns (parishes) all seem to compete with each other in building bigger and better facilities. Canillo has its Palau de Gel (Ice Palace) where, for a few dollars, you can ice-skate, play squash, work out in the gym, or perspire in a sauna. Other parishes offer Olympic-size pools, indoor tennis courts, and climbing walls.  From spring through fall, there’s even more to do. Tennis, horseback riding, mountain-biking, and hunting are popular. There’s an 18-hole golf course just across the border in Spain. The rod-and-reel crowd has an almost limitless choice of places to fish. The principality is famous for its trout and a respectable catch is almost guaranteed from its lakes and rivers, some of them stocked from Andorra’s own hatcheries.

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Walking country

Most of all, this is walking country. The highest peak (Coma Pedrosa) is 9,708 feet. Energetic hikers have few problems getting there or to the many others over 9,000 feet, such as Pic de la Serrera or Font Blanca. It takes me four or five hours to reach the top. 

Along the way, there are streams and waterfalls, forests and meadows carpeted in blue gentian, narcissus and wild red rhododendron. At around 7,000 feet, pristine lakes nestle in basins scraped from the rock by ancient glaciers and at the summits and I watch golden eagles flying elegant figures-of-eight in an improbably blue sky. 

On days like this, you wonder whether it gets any better. 

One reason we chose to settle in Andorra was its many differences from Canada. As well as freedom from taxes, we wanted a complete change in lifestyles. We weren’t disappointed. Living in Andorra is like living in northeast Spain, with whose people it shares a common culture. This means, amongst other things, there’s always a festival. 

Party time

Sometimes, it’s the residents of just a single street throwing a party—a festa del barri. The Three Kings parades in the first week of January, the pre-Lent Carnival celebrations, or the festes majores held by each parish in July and August shut down the entire country. 
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One of my favorite festivals is the annual Escudella, held in Sant Julia on St. Anthony’s Day, Jan. 20. It’s a communal meal, commemorating the saint’s deliverance of the town from a diphtheria epidemic. Chefs prepare a stew of chicken, beef, and sausage in huge vats over wood fires set in the plaza. By midday, half the parish is standing in line with plates and cutlery at the ready. Everything is free, including bread, wine, and dessert. For local restaurant owners, this is not one of their better days. 

Portions for mountain appetites

Eating out in Andorra is enjoyable, inexpensive—and filling. Restaurants gear their portions to mountain appetites and to patrons who like to see their main course fork-lifted to the table. Carn a la brasa (beef, lamb, or pork grilled over an open fire) is a favorite, as is truita (trout), conill (rabbit), bacalla (cod, prepared in any of a half-dozen different ways), botifarra (spiced sausage) and trinxat (sliced potatoes, mixed vegetables, olive oil, and garlic). Allioli (a delicious garlicky mayonnaise) is served with just about everything. 

For two people, expect to pay $20 to $25 in the average, small restaurant. This included a bottle of house wine and dessert. For more sophisticated fare and up-market ambiance, the check will be $65 to $70 at any of my favorites: Versailles, Borda Estevet, Moli dels Fanals, Can Manel, and San Marco. (WHERE ARE THESE RESTAURANTS?)

For a major celebration, drive just over the border to one of Spain’s finest restaurants at the El Castell Hotel in Seu d’Urgell. And don’t miss the Hostal Dolcet in the nearby village of Alas. It’s not in the fine dining category, but has character in spades. Order cabrito (kid goat) and you get half the animal. 

Like kids in a candy store
While our house was being completed, we never felt comfortable about being away for more than 24 hours. When we were finally free, we were like kids in a candy store. Barcelona and the Costa Brava were only three hours away, Madrid and Toledo a half-day. We drove to Pamplona and ran with the bulls for two days, moved on to the emerald-green Basque country and the elegant, Atlantic resort of San Sebastian. On other trips, we headed south to Alicante, Almeria, Marbella, and the Costa del Sol. In time, we scouted most of the peninsula. 

On the French side, it was only 80 miles to the medieval walled city of Carcassone, the Corbierès vineyards, and the Mediterranean coast. Bordeaux and the Dordogne were a half-day away, Paris and the Brittany coast, a full day. We staggered away from the tables at some of the country’s finest restaurants, but also ate and drank at countless unheralded auberges where the food was also worth a star or two. 

It may sound like a back-handed compliment to say that Andorra is a great base from which to explore France and Spain, but for its residents, it’s one of the country’s great assets.

The real estate market
Housing has never been cheap in Andorra. Many properties are on plots hewn from the side of a mountain. Excavation is expensive and, depending on the site, you may need a retaining wall to prevent earth and rocks cascading into your back yard. If you’re considering building, you’ll need to budget about $35 per square foot for a plot, plus $110 per square foot for construction. Professional fees, interior finishing, appliances, and galactic-scale aggravation are extra. 

Parishes add to the cost by insisting that buildings are clad with stone and roofed with dark-gray slates to preserve the rustic appearance characteristic of the country. For months, a team of Portuguese workmen chipped and shaped stones outside our garage, then hoisted them up onto scaffolding where they cemented them to the brick walls. It cost us $15,000. An Italian neighbor found out the hard way that no exceptions are allowed. After importing an entire log house in knock-down form, he was forced to cover most of the exterior with stone. 

The good news is that when you combine brick and stone walls two-and-a-half-foot thick with wide, picture windows, you get enormous, exterior ledges with enough space to plant a small garden. For most of the year, boxes filled with crimson and white geraniums transform Andorra’s house and apartment facades into floral showpieces. 

We made two mistakes when we went shopping for a house. First, we purchased a property that was only half-constructed. Second, because we’d previously renovated in Canada, we thought that, rather than employing a builder to finish it, we would act as our own general contractor. I could write a book about the experience. 

Bottom line—purchase a resale
Bottom line—forget about building and purchase a resale. Prices of less expensive properties moved up 15% over the last year and the same is expected next, but if you’re looking for a middle price-range, detached house, it’s still basically a buyer’s market. 

Most foreigners buy in the parish of La Massana (population 6,000) in the northeast of the country. The British settled there years ago, but the community is now much more international. 

Good locations are the outskirts of La Massana town and the nearby villages of Anyos, Sispony, L’Aldosa, Pal, Erts, Xixerella, and Arinsal. The parish of Ordino (adjacent to La Massana, population 2,000) is also popular but few of its properties come on the market and prices tend to be correspondingly high. 

In the La Massana area, the minimum asking price for any kind of detached house is about $285,000. Some run as high as $1.5 million but most are $400,000 to $700,000. Typically, they’ll be on plots of 5,000 to 7,500 square feet with built-up space of 2,000 3,500 square feet and will include three to five bedrooms, two to four bathrooms, good-size principal rooms, a fireplace or two, terrace, a spacious garden, and a two-car garage. 

La Massana parish also has many low-rise apartment buildings, particularly in Arinsal. The apartments are designed for short-term rental to skiers—there are three resorts only a few minutes’ drive away—or to tourists at other times of the year. They’re small (600 to 800 square feet) but are relatively inexpensive ($70,000 to $100,000) and many foreigners and Andorrans purchase them for investment.

5% returns, 6% capital appreciation
The Servissim agency (see Recommended realtors’ nbsidebar belowXXXX), says that, after allowing for management costs, the annual net return on this kind of property over the last 15 years has averaged about 5% in income plus 6% in capital appreciation. 

La Massana and other parishes, particularly Andorra la Vella, Encamp, and Ordino also offer more substantial apartments in the price range of $150,000 to$300,000. Typically, these are 1,000 to 1,500 square feet with two to three bedrooms, one to two bathrooms, a terrace, and parking space in a basement garage. There’s a selection of larger apartments in high quality buildings available at prices up to $600,000. 

Noisy neighbors
Noisy neighbors can be a problem and many of Andorra’s apartments are not well soundproofed. If you’re shopping, insist on at least one viewing appointment just before or after dinner (at around 9 p.m.) when the neighbors are in and noise levels in the building are likely to be at their highest. 

If you’re really sensitive to noise, it would be best not to live on a main road in any of the major towns. Rush hour starts early. At the other end of the day, young Andorrans party late and when the discos turn out at 1 a.m. (2 a.m. on the weekend), you may wonder if the street outside your window has become part of a Formula 1 circuit. 

After La Massana, the next most popular location for foreigners is the parish of Sant Julia de Loria (population 7,500) near the Spanish border. 

The town itself consists mainly of apartment buildings interspersed with some very expensive detached houses, which rarely go on the open market. The mountains overlooking Sant Julia on the east also have four urbanizations: Juberri, Auvinya, Aixirivall, and Certes. All of them are about 1,000 to 1,200 feet above the town (a 25- to 40-minute drive) on well paved, but hair-pinned (and sometimes hair-raising) roads. 

A patchwork of green fields
Sant Julia deserves its popularity. This is the country’s main tobacco-producing area and with hillsides a patchwork of green fields dotted with farmhouses, drying barns, and Romanesque churches, it’s postcard-pretty, peaceful, and relatively undeveloped. Snow here is less frequent than elsewhere in the country and the temperatures a few degrees warmer. In January and February, we often sat out in T-shirt and shorts on the terrace of our Certes house. 

Compared with La Massana, properties are also less expensive. Resales in the four urbanizations are mostly priced at $320,000 to $450,000, although a few run up to $800,000. Plot sizes, living space, and equipment are about the same as houses in La Massana, but the views across the valley and far down into Spain are even more sensational. 

The flip side is that it can take longer to sell in Sant Julia. Three of our friends have been waiting to move for the last four years. One has just got lucky. When we decided to relocate to an apartment in Andorra la Vella (the daily drives up and down the mountain finally got to us), it took us three years. However, selling a relatively expensive detached house is not easy anywhere in Andorra. 

And the down sides?
Aside from holiday-type properties, there’s not much choice in the rental category either for houses or apartments. If you’re interested in a long-term rental, you’ll need to talk to a wide selection of realtors, especially those who deal almost exclusively with Andorran or Spanish clients. They’re the only ones who build for investment income. For holiday apartments, go to Servissim’s website and click on “Self-Catering Apartments.” They range from $300 to $450 per week in low summer season, increasing by about 50% for high summer, and by up to 250% in the ski season. 

There are aspects of Andorra which might not trouble you as a visitor, but which you could find a problem as a full-time resident. Top of the list is language. Andorra’s official language is Catalan, the same as in Barcelona and northeast Spain. Like Spanish (Castilian) and French, it has its roots in Latin, but that’s where the resemblance ends. 

Few foreigners make the effort to learn Catalan because it’s difficult and because for everyday purposes, they can usually get by in Spanish (Castilian) or French, both of which are widely understood and spoken. Be aware, though, that unless you do have some Castilian or French, you will find communication difficult and frustrating, particularly when dealing with the comu and central government, phone, and hydro companies. 

Most doctors and dentists (medical facilities are good and care standards high, by the way), are reasonably fluent in English as are bankers and lawyers, although in some cases, you may have to take it slowly and keep sentences short and simple. The International Club helpline has a list of professionals and trades people whose English is up to scratch. 

Other things that might trouble you as a resident are: the horrendous, year-round traffic problem, aggravated by seasonal and holiday visitors; difficulty in parking, particularly in Andorra la Vella; air pollution in the main valleys—courtesy of Andorra’s incinerator and hundreds of belching, diesel-engined behemoths transiting daily between Spain and France; construction noise and dirt (there are buildings going up everywhere); and the relatively small number of other compatriots (depending on your nationality) available for social relationships. 

However, most of these are problems you’ll deal with in many major American cities or Europe, but since they’re also the things you’re probably trying to escape, you might not be overjoyed to encounter them again in Andorra. 

If you’re seriously considering a move, follow Kathleen Peddicord’s advice (IL April 2002) and, amongst other things, play the resident for a few months. Rent a holiday property and explore the countryside. Shop in the stores…join the International Club and participate in some of its activities…sign up for a weekly walk…discover where the expats hang out (in Sant Julia, it’s the Principat Hotel) and ask if you can sit in on the group. Invite guests for drinks or a meal and inquire about their own experience of the country. One thing they’ll tell you is that you needn’t be concerned about personal security. Andorra has virtually no crime. 

Residence permits

Full-time residents (technically, more than 90 consecutive days in any one year), need a residencia. There are two categories for foreigners; one for retirees, the other for those who want to work or start a business. 

Unless you’re an E.U. national, a working residencia is almost impossible to get.

You can own a property and spend more than 90 days in the country without a residencia provided you can prove that it’s your secondary residence and you’re normally resident elsewhere. 

To obtain a retirement residencia, you must:
1. Own or lease a house or apartment—or produce an agreement to purchase or lease. By law, landlords must offer a five-year lease. This is to protect tenants. If you want to leave early, you can usually arrange to do so. 
2. Prove you have annual income of $25,000 plus $6,000 for each dependent. 
3. Deposit $24,000 (plus $6,000 for each dependent), with the Government Finance Agency. This is an interest-free loan and will be refunded only when you surrender your residencia. Unmarried couples are treated as separate individuals. Each has to make the $24,000 deposit but only one has to satisfy the annual income condition.
4. Produce evidence of coverage under a private health plan. 
5. Obtain a certificate from your local police confirming you have no criminal record.
6. Pass a medical test to show you have no notifiable disease.

The Immigration Dept usually takes about a month to process applications. Residencias are valid for one year initially, with three-year renewals thereafter. You must spend at least 183 days in the country every year, register and insure your vehicle in Andorra, and apply for an Andorran driving license. Previously, residencia holders were eligible for social security benefits. This is no longer an option, but you can still educate your children free in the country’s excellent school system. 

Buying property

Non-Andorrans can purchase an apartment, a building plot not exceeding 10,000 square feet, or an existing house (generally referred to as a ‘chalet’) on a lot not exceeding 10,000 square feet. Andorran banks offer mortgages up to 25 years for 60%-70% of the purchase price. 
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Your realtor will help draw up the standard contract of purchase to which you can add your own conditions. For examples, “subject to obtaining residencia,” or “subject to survey.” The contract can be in any language that you and the vendor agree. On signing, it’s customary to hand over a certified check for 10% of the price. The agent holds this in escrow. Agents post a bond to secure escrow accounts.  After signature of the contract, your realtor will submit a “permission to purchase” request to the government. On clearance, you have up to 12 months to complete the transaction. If the seller defaults, you get your deposit back plus a further 10% as penalty. You can enforce this by applying to the court, which prevents the seller from dealing with the property until the penalty is paid. Transfer of title is via the escriptura publica, drawn up by one of the four notaries public. They are government appointees responsible for supervising the transfer of ownership so you don’t need to retain a lawyer. Your escriptura, as with all official documents, will be in Catalan. The notary, or your realtor, will translate it for you prior to signing. Afterwards, you can ask for a written translation in English.

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The government charges a 2.5% property acquisition tax, payable by the buyer on the declared purchase price. The buyer also pays the notary’s fee. For properties from $120,000 to $300,000, this is $600 plus 0.2% of the purchase price. Property taxes differ according to area, but typically, should not exceed $400 annually.

Although buying a property is straightforward, you should look out for three things. First, if an adjoining plot is still undeveloped, get a surveyor to confirm all your vendor’s structures are inside the lot lines. Our vendor had a wall running to the back of the property. After an Andorran purchased the adjacent lot, he complained that part of the wall was on his land. He was right. Rebuilding the wall cost us $1,500. 

Second, be aware of risks in areas under a mountain with loose scree or overhanging rocks. A Dutch couple in our urbanization had just finished eating one evening when a boulder crashed through the roof of their bungalow making matchwood of the dining room table where they’d just been sitting. Even if your location doesn’t seem to be at risk, check that your insurance covers such damage. We were told some insurance companies exclude it.

Third, by custom, you must support your neighbor’s land. If someone builds higher up the mountain behind you and his land collapses on to yours, you have to build the retaining wall. It can cost thousands of dollars. Since insurance companies don’t cover this risk, your best strategy (if you’re considering a mountain-side location), is either to buy where no-one can build behind, or find a house with a wall that already supports the land in back of you. 

Recommended realtors
From personal experience, I can recommend three companies. All provide caretaker services for temporarily absent owners as well as administering properties and collecting rents for buyers who purchased for investment. Servissim and Invico feature selected resale properties at their websites. 

• Servissim S.L. (Simon Binsted, President), Edifici Areny, Baixos, Ctra General, Arinsal, La Massana; tel. (376)73-78-00; fax (376)73-78-04; e-mail services@servissim.ad; website: www.servissim.ad

Servissim offers free, e-mailed “help sheets” (sign on for these at the website) covering 17 topics such as buying property, residential qualification, company formation, vehicle import regulations, wills, etc. Its monthly newsletter keeps residents and non-residents informed about developments in the country—particularly useful as Andorra has no English-language newspaper. Subscription costs $80 annually. Servissim also specializes in short-term rentals (one week or longer) of holiday apartments. Click on “Self-Catering Apartments” on the website. 

• Invico S.L. (David Hill, President), Casa Areny PB1, Avinguda El Traves, La Massana; tel. (376)83-92-41; fax (376)83-92-43; e-mail sales@invicoandorra.com; website: www.invicoandorra.com

Their website has a useful “Andorra A-Z” summary of living conditions in the country. 

Roc Propietats (Christian Muñoz, President); Ctra General, La Massana; tel. (376)83-53-46; fax (376)83-66-74; e-mail rocpropietats@andorran-properties.com; website: www.andorran-properties.com

Make sure your agent is an AGIA member. Agents have their own listings (there’s no American-style, multiple listing service), so there are inevitably overlaps. Your best strategy is to exhaust the resources of one before moving on to another. The selling commission is normally 5% but usually discounted to 3.5% to 4% on all except lower-priced properties. 
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