Top Tax Havens See 2007 Real Estate Price Hikes
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by: Paul la Vella
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Enjoying the same tax benefits as better known Monaco, the small European tax haven of Andorra has seen some startling rises in her property values in the last two years, with a repeat performance in 2007 looking likely.
In 2005 property inflation hit 19 per cent, and in 2006 the official property inflation reached sixteen per cent, and according to Andorra real estate specialists 2007 is likely to see a further property price rise.
'There are three streams of buyers for Andorra', say one of the Andorra property companies, 'An active local market, second home buyers looking for ski apartments, and international buyers who want to gain residency in a tax haven. The international buyers add pressure on prices and often buy three or four bedroom apartments and chalets, making sure that the top end of the market is as active as the low and mid range properties.'
With a lack of snow for the first eight weeks of the Andorra ski holiday season from January to April earlier this year, the second home buyers were thinner on the ground than usual. The number of tourists fell by some fifteen per cent, and that impacted the property market as some visitors like it so much they buy a property in popular resorts such as Arinsal and Soldeu. So we feel a five to ten per cent rise in Andorra property values could be realistic for 2007.'
Andorra as a tax haven destination has been benefitting recently from the high cost of real estate in Monaco. Monaco recently became the most expensive country for property in Europe, and while a 32m2 studio in Monaco will cost close to a million Euros including the closing costs, Andorra offers over 100m2 three bedroom two bathroom apartments at less than half the price - with the same tax advantages as better known Monaco.
The different type of buyers tend to head for different areas of Andorra, with the ski apartment buyers tending to purchase in the key ski resorts of Soldeu and Arinsal.
Those looking for residency go more for the year round villages and towns which have a resident community.
Outside of the capital (la Vella) these tend to be La Massana and the upcoming village of Anyos, Ordino and Arinsal, although Arinsal's nightlife during the ski season early December to late April tends to steer many newcomers to La Massana and Ordino.
In addition to attracting international buyers in increasing numbers for residency, the Andorra authorities have invested heavily in their ski infrastructure, boosting the country's tourism potential and subsequently Andorra's real estate market.
And for this year's ski season Andorra has opened a new family friendly ski park in Arinsal, moving away further still from her old image of a cheap and cheerful ski holiday for 18-30 year olds to one that caters well for all.
One of the few drawbacks when taking residency in Andorra compared to Monaco has been access to a major international airport, as there is no Andorra Airport. While Monaco enjoys close proximity to Nice Airport, with a ten minute helicopter ride available, Andorra's nearest airports have been Barcelona and Toulouse, three hours away, with no direct Andorra flights.
Recent road improvements between Barcelona and Andorra has cut this by thirty minutes, and there is a possibility of a scheduled helicopter service, Andorra weather forecast permitting, or more likely ten minutes from the Spanish Andorra border, allowing quicker access to international flights for business people considering Andorra residency.
Other improvements within Andorra include new tunnels, allowing quicker access to the ski fields, and driving around Andorra easier.
With more demand from international buyers who want to take advantage of Andorra residency, the government announced in February that it was increasing the number of residency applications from the previous 200 year a year to 500.
'Andorra is becoming more popular among the international buyers', observes a local travel guide, 'And with Monaco real estate prices sky high it comes as no surprise that the government has moved favourably by allowing more residents. But it's not just the tax free living they come for - it's the weather in Andorra as well for many who see the ideal opportunity to live in a tax free environment and enjoying winter sports at one of Europe's top ski destinations.'
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For Andorra skiing information, including Andorra hotels and the Andorra weather for today and a 5 day weather forecast visit YourAndorra.com
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