Set between France and Spain, one of Europe's best kept secrets and hardly known outside of the skiing and financial communities, 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 possible.

In 2005 property inflation hit 19 per cent, and in 2006 the official property inflation reached sixteen per cent, and according to property for sale in Andorra specialists Tribune Properties 2007 is likely to see a further ten per cent rise.

'There are three streams of buyers for Andorra', say Tribune, '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 season, the second home buyers could be thinner on the ground than usual. The number of tourists is down by some fifteen per cent, and that could impact 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 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, bringing out an Andorra map for many investors recently.

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.

Andorra Weather Forecast 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 Andorra residency 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 residency in Andorra.

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 Andorra 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', comment local travel guide YourAndorra, '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 Andorra snow report as well for many who see the ideal opportunity to live in a tax free environment and enjoying winter sports on top.'

Taxes both federal and state are to be paid by investors. According to financial whizzes every investor needs wise financial planning and astute tax management so that you do not pay more taxes that you need to. Avoiding paying tax is a crime but paying the right amount of tax is astuteness.

The first step is to know what tax rules apply and how taxes on investments are to be computed. These days the internet has in depth articles and tips written by experts in the field of investments and taxations that can be read and used as a baseline. If you are still nervous or uncertain then take the help of a qualified and reputed tax professional a CPA or tax lawyer. What you pay in their fees will be far less than the excess tax you will pay if you are unsure and confused on how tax on investment is to be calculated.

Here are a few tips for you to use and save money:

1. Do you know reinvested dividends in mutual funds reduce taxes? You must deduct the reinvested dividends from capital gains calculations. Remember every drop makes an ocean in the end.

2. Consider investing in bonds especially when the stock market is erratic. Bonds are a “safe haven.” Municipal bonds are tax exempt and offer great tax advantages. So, study different bonds and see how much you can save in taxes by diverting some of the funds you normally invest in the stock market to bonds.

3. If you trade online and maintain records on investments on your home computer you can claim purchase of the computer and accessories as deductibles. Find out what you are eligible for?

4. Trading in stocks means having to pay a capital gains tax. But using a tax deferred account can be beneficial. Examples of tax deferred accounts are: individual retirement account and simplified employment pension plan. Such funds are tax shelters and when you cash in on retirement you will be in a much lower tax bracket and not earning a steady income.

5. Think of balancing profits and losses. When you sell a profitable investment you should consider selling a loss making one too so that the profit gained by one sale is compensated by the loss accrued. Short term losses can be adjusted against short term gains. These are “paper gains and losses” and can be beneficial. Work out the realities of such a strategy, ask a tax consultant.

6. Be sure to deduct costs like broker’s fees and commissions on purchase and transfer of stocks. These can be added to your costs and subtracted for sale price of stocks. Often brokerage when totaled up at the end of a year can add up to a substantial sum.

The world of investing has many aspects and it is important to know how you can save on taxes. Be methodical and maintain investment records in such a way that gains, losses, costs, and more are all available on tab. Use a personal finance software or spreadsheet. Online tools like Gainskeeper will help you keep track of your investments. Captial gains needs to be computed taking into consideration cost basis as well as selling price.