Andorra Rental Income Guide: PIT Rates 0-10%, Deductions 2026
Rental income from property in Andorra is taxed as personal income at the progressive PIT rates (0%, 5%, 10%). Landlords can deduct expenses such as maintenance, management fees, insurance, and mortgage interest from rental income. Short-term rentals (Airbnb-style) are subject to the same rules. Here is how rental income taxation works in 2026.
Rental income taxation in Andorra is governed by the consolidated tax code. Unlike some countries that apply a flat withholding tax on rental income, Andorra includes rental income in the individual's total taxable income, subject to the progressive PIT brackets. The €24,000 annual tax-free threshold applies to total income including rent. The Departament de Tributs i Fronteres requires landlords to declare rental income and pay tax accordingly. Personal income tax rates →
Real-world example: A landlord in Andorra la Vella earns €30,000 per year in rental income from two apartments. Allowable deductions (maintenance, insurance, management): €6,000. Net taxable rental income: €24,000. This is added to other income (e.g., salary of €20,000). Combined income: €44,000. PIT: 0% on first €24,000 = €0, 5% on next €16,000 = €800, 10% on remaining €4,000 = €400. Total PIT: €1,200. Effective tax rate on rental income: 4%. Property tax and transfer fees →
Taxation of Rental Income
- Residential rentals: Income from leasing residential property is taxed at progressive PIT rates (0-10%)
- Commercial rentals: Income from commercial and industrial property is taxed at the same PIT rates
- Short-term rentals (Airbnb): Income from tourism accommodation is taxed under the same rules
- Corporate landlords: Companies earning rental income pay CIT at 10%
Rental income is generally treated as passive income. However, active property management may be classified as business income.
Allowable Deductions
Landlords can deduct the following expenses from gross rental income:
- Maintenance and repairs: Costs of keeping the property in habitable condition
- Management fees: Fees paid to property management companies
- Insurance premiums: Property insurance, liability insurance
- Mortgage interest: Interest payments on loans used to purchase or improve the rental property
- Utilities: Water, electricity, gas if paid by landlord (not passed to tenant)
- Depreciation: Buildings may be depreciated at standard rates
- Professional fees: Legal and accounting fees related to the rental activity
- IBI (property tax): Annual property tax paid to the parish
Deductions must be supported by proper documentation (invoices, receipts, contracts). The Departament de Tributs i Fronteres may request evidence during tax audits.
Registration and Compliance
- Tax registration: Landlords must register as a taxpayer if not already registered
- Rental contract: Written rental contracts are recommended and should be registered
- IGI consideration: Residential rental is generally exempt from IGI. Commercial rental may be subject to IGI
- Annual filing: Rental income must be declared in the annual personal tax return filed by April 30
Non-compliance can result in penalties and back-tax assessments.
Is there a withholding tax on rental payments?
No. Rental payments from tenants to landlords are not subject to withholding tax in Andorra. Tenants do not need to deduct or remit any tax. The landlord is responsible for declaring and paying the tax on rental income.
Can rental losses be offset against other income?
Yes. If allowable deductions exceed rental income (creating a rental loss), the loss may generally be offset against other income in the same tax year, subject to anti-avoidance rules.