From 1 January 2027, Andorra enters a new phase in the regulation of habitual residential rentals.
Law 11/2026 of 4 June establishes a transitional system running until 2030 for leases that have been subject to the extraordinary statutory extensions of recent years.
The aim is not to deregulate all rents at once. The transition will be gradual and will depend mainly on two factors: the date of the lease and the current rent per square metre.
The full legislation is available through Law 11/2026 on the Andorran Legal Portal. The Government has also published a practical guide to the rental agreements affected by the new rules.
Which leases does the new law apply to?
The new regime primarily affects habitual and permanent residential leases entered into in 2021 or earlier.
The relevant date is the date of the most recently signed lease. A tenant may have lived in the same apartment for many years, but if a new lease was subsequently signed, that later date is the one that matters.
The law does not allow all these agreements to end simultaneously. Instead, it establishes a gradual timetable between 2027 and 2030.
When can the statutory extension stop applying?
The relevant date depends on the age of the lease and, in some cases, the current rent per square metre.
| Lease or current rent | Year in which the extension regime may end |
|---|---|
| Signed in 2012 or earlier, or rent ≤ €6/m² | 2027 |
| Signed between 2013 and 2015, or rent ≤ €7/m² | 2028 |
| Signed between 2016 and 2018, or rent ≤ €8/m² | 2029 |
| Signed between 2019 and 2021 | 2030 |
This does not mean that the lease automatically terminates in that year.
Once the relevant date is reached, the landlord may continue the existing lease, enter into a new one or terminate the agreement where the law allows.
In the case of termination or renewal, the landlord must give at least six months’ notice before the relevant annual lease anniversary.
If no decision is communicated within that period, the lease is tacitly extended for a further year. The rent may then be updated in line with the CPI.
How much can the rent increase under a new lease?
One of the most important aspects of the legislation is that leaving the extension regime does not allow the landlord to immediately raise the rent to any amount they choose.
If a new lease is entered into, whether with the same tenant or a new one, its minimum term is five years. The rent also remains temporarily subject to limits.
The general system provides for progressive increases according to the previous rent per square metre:
| Previous rent | Maximum annual increase for 5 years |
|---|---|
| ≤ €7/m² | 6% + CPI |
| > €7 and ≤ €8/m² | 5% + CPI |
| > €8 and ≤ €9/m² | 4% + CPI |
| > €9 and ≤ €10/m² | 3% + CPI |
| > €10 and ≤ €12/m² | 2% + CPI |
| > €12/m² | 1% + CPI |
For new leases entered into in 2027 under this mechanism, the CPI component applied during the first year is capped at 2.5%, even if the actual CPI is higher.
The principle is straightforward: the lower the previous rent, the greater the permitted gradual adjustment.mple : plus l’ancien loyer était bas, plus son adaptation progressive peut être importante.
A second system based on the affordable reference price for each parish
The legislation provides another option where the existing rent is below the affordable reference price established for the relevant parish.
In that case, the landlord may choose to move the rent gradually towards that reference value. The difference is spread over three years, in addition to the applicable CPI adjustment.
The reference values established for this legislation are:
| Parish | Reference price |
|---|---|
| Canillo | €7.95/m² |
| Encamp | €9.47/m² |
| Ordino | €8.81/m² |
| La Massana | €9.56/m² |
| Andorra la Vella | €10.70/m² |
| Sant Julià de Lòria | €9.22/m² |
| Escaldes-Engordany | €10.70/m² |
These figures serve a specific purpose under the legislation. They should not be interpreted as general market rents for each parish.
To calculate the applicable figure correctly, the precise area of the dwelling is also important. Terraces, balconies, gardens and storage rooms should be identified separately where relevant.ent lorsque cela s’applique.
Situations in which this regime does not apply
The law provides for several exceptions.
The main ones include:
- dwellings with a monthly rent of €2,500 or more, excluding parking spaces, storage rooms and utilities;
- single-family homes;
- certain leases linked to non-lucrative residents;
- situations where safety, health or sanitation works are incompatible with continued occupation;
- recovery of the dwelling for the landlord’s own use;
- recovery for family members up to the second degree, subject to the conditions set out by law;
- certain situations where housing is provided to the landlord’s employees;
- acquisition of a dwelling by a new owner intending to establish their habitual residence there;
- voluntary termination by the tenant;
- certain cases of vacancy attributable to the tenant.
Each exception is subject to specific requirements. It is not sufficient for the landlord simply to invoke one of these grounds.
Can the landlord recover the property to live in it?
Yes, provided the prescribed procedure is followed.
Where the landlord wishes to recover the property for their own use, formal notice must be given at least six months before the relevant lease anniversary.
The property must then genuinely be used as the landlord’s habitual residence for a minimum of five years, except in certain justified circumstances.
A similar rule applies where the dwelling is intended for family members up to the second degree.
The legislation also requires supporting documentation so that the Government can verify that the stated use is actually respected.
What happens if a rented apartment is sold?
For leases subject to the new legislation, the sale of the property does not in itself automatically terminate the tenancy.
The purchaser initially takes over the position of the previous landlord.
An exception exists where the new owner acquires the apartment in order to establish their habitual and permanent residence there. In that situation, the notice, timing and evidence requirements established by law must be met.
Anyone purchasing an occupied property should therefore review the lease before completing the transaction.
A full renovation does not automatically allow the lease to be terminated
This point can easily cause confusion.
A landlord’s intention to completely renovate an apartment is not, by itself, sufficient grounds to terminate a protected lease.
The situation changes where works relating to safety, health or sanitation make it impossible for the dwelling to remain occupied.
In that case, the legislation requires specific technical and administrative conditions to be met, including the relevant licence and evidence that the works cannot be carried out while the property remains occupied.
This distinction deserves particular attention, because a voluntary renovation and works that are technically incompatible with occupation are not treated in the same way.
What happens if the maximum permitted rent increase is exceeded?
The law includes protections designed to prevent increases above the permitted limits.
If the landlord charges more than the amount allowed, the tenant may claim the excess back. Amounts paid incorrectly may also be offset against future rent payments.
Administrative penalties may also apply.
The new regime also strengthens the monitoring of rental agreements through SICAR, the Sistema d’Informació dels Contractes d’Arrendament. Rental agreements must be provided to the relevant Comú so they can be incorporated into the system.
What this change means for landlords, buyers and investors
The new regulation provides more flexibility than the forced-extension system of recent years, but it does not mean an immediate return to completely unrestricted rents.
Between 2027 and 2030, several situations will coexist: leases that remain subject to statutory extension, leases that may end and new leases with temporarily limited rent increases.
Before buying, selling, renovating or considering any transaction involving a rented dwelling, four pieces of information are particularly important:
the date of the most recent lease, the monthly rent, the relevant floor area and the specific status of the property.
These details make it much easier to understand which regime applies and what options may be available.
The information in this article is general. In specific contractual situations, particularly where termination of a lease is being considered, the case should be checked against the legislation in force and, where necessary, reviewed with a legal professional.