ANDORRA Law and Practice Contributed by: Elena Redondo, Albert Hinojosa and Marc Ambrós, Cases & Lacambra
2.9 Condemnation, Expropriation or Compulsory Purchase In Andorra, there is a law of compulsory expro - priation. The procedure first requires the prior declaration of the public utility of the construction project and necessitates the occupation of the property or the acquisition of the affected eco - nomic rights. In order to carry out the expropria - tion, the expropriator must develop a file, which is public information and be published in the Andorran official gazette. Later, the government transmits the entire file to the Andorran Parlia - ment ( Consell General ), with all the observations and objections received, attaching a report sug - gesting the approval or denial of the declaration of public utility and the necessity of occupation. The Andorran Parliament makes the final deci - sion, which has to be published in the Andorran official gazette and is directly enforceable. 2.10 Taxes Applicable to a Transaction Asset Deal The purchase of a property would be subject to a Transfer Tax at a rate of 4% ( Impost sobre trans- missions patrimonials ) or to IGI ( Impost General Indirecte ), which is the Andorran VAT, at a rate of 4.5%, depending on the condition of the seller. If the seller is a company or professional acting in a professional capacity, IGI will be applicable; otherwise, Transfer Tax will be applicable. Share Deal The purchaser would be subject to Transfer Tax only if at least 50% of the company’s assets are real estate located in Andorra, and that as a result of the transaction they will hold more than 20% of the company’s shares. In both cases – Asset Deal or Share Deal – capi - tal gains on the sale of a property would be sub - ject to Corporate Income Tax ( Impost sobre soci- etats ) if the seller is a company, at a nominal rate
• civil law, to have the base knowledge of property rights and the different charges and encumbrances that the real estate could have; • administrative law, in order to know the regu - lations pertaining to planning and zoning; and • tax law, to use the most beneficial tax struc - ture to acquire the real estate. 2.7 Soil Pollution or Environmental Contamination In accordance with Andorran legislation regard - ing civil liability, the liability for others’ actions must be considered. In this sense, the buyer of the real estate shall be liable for any soil pollution or environmental contamination of real estate, even if it is not attributable to said buyer. The liability for others’ actions allows the buyer of the real estate to claim the necessary expens - es to compensate for the damages against the seller since they had responded previously when it did not belong to them. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law A buyer can ascertain the permitted uses of a parcel of real estate under the applicable zon - ing and planning law by consulting the Andor - ran official gazette ( Butlletí Oficial del Principat d’Andorra – BOPA), where the permitted uses for a plot or zones are published. It is possible to enter into a specific development agreement with relevant public authorities to facilitate a project relating to, eg, the execution of a project of national interest or local sectorial plans, a project concerning the construction of roads and communications infrastructure, or the execution of the hydraulic and energy policy.
20
CHAMBERS.COM
Powered by FlippingBook