Monaco real estate buying guide : how to buy in Monaco ?

When it comes to investing in real estate, Monaco shines as an attractive and exclusive destination. This principality nestled on the Côte d'Azur offers much more than breathtaking views. Its tax advantages and state status make it a unique location for investors from all over the world.

Monaco's real estate market: a reality apart

Monaco, as a micro-state, offers a unique legal and tax framework that is in many respects highly advantageous. With a surface area of just 2.02 km², every square meter is precious and sought-after.

The scarcity of available land makes this a very special real estate market, where demand often outstrips supply.

In the prestigious Carré d'Or district in particular, apartment prices regularly reach record highs, approaching €80,000 to €90,000 per square meter. Renowned residences such as Métropole, Mirabeau, 26 Carré d'Or and Villa Hermosa offer some of the city's most luxurious accommodation. This upward trend in property values extends throughout the Principality, with a significant increase in investment value over 10 years. Indeed, data from the Observatoire de l'Immobilier for January 2021 indicates an average increase in price per square metre of over 52.3% over this period, making real estate investment in Monaco a truly sustainable choice.

As far as rental yields are concerned, although they are usually less than 2%, a property investment in Monaco proves advantageous over the long term. In fact, according to statistics, the value of real estate in Monaco has been rising over the years. Becoming a property owner in Monaco also opens up the possibility of becoming a Monegasque resident, and thus benefiting from all the tax advantages that this entails.

Monaco real estate buying process

Buying a property in Monaco requires a meticulous and specific approach due to the singularity of the Monegasque real estate market. The purchasing process involves several crucial steps for investors wishing to establish themselves in this prestigious principality.

Who should you surround yourself with when buying a property in Monaco?

It will be essential to surround yourself with Monaco market professionals to complete a real estate transaction in Monaco. The real estate consultants in the Sotheby's International Realty network are experts in their sectors and will be able to guide and advise you in your search.

Before embarking on a purchase, it's essential to carry out in-depth research into the Monegasque real estate market. Understanding popular neighborhoods, price dynamics and market trends is essential to making informed decisions. Your Sotheby's International Realty advisor will be your key asset at this stage, thanks to his or her expertise and sector knowledge.

Calling on experienced professionals such as real estate agents specialized in the Monegasque market and legal advisors is crucial. Their expertise in the legal and fiscal intricacies of Monaco is essential to navigating this unique market effectively.

Regulations and constraints specific to Monaco

The Monaco real estate market is subject to strict regulations to maintain the integrity and quality of properties. These regulations cover strict criteria for buyers, restrictions on resale in certain cases, and specific documentation requirements. This is also where your Sotheby's International Realty advisor comes in, bringing his or her experience and expertise to bear.

The purchase procedure involves signing a preliminary sales agreement before a notary, completing an initial deposit, carefully checking the legal documents and finalizing the transaction before a notary. These formalities give rise to unavoidable additional costs, including :

1. Agency fees chargeable to the buyer equivalent to 3% plus VAT.

2. Agency fees chargeable to the seller equivalent to 5% plus VAT.

3. Notary's fees, generally 6%.

In addition to these fees, only co-ownership fees will be payable by the new owner.

Stages of a property purchase in Monaco

The buying process often involves painstaking steps, such as signing a compromis de vente before a notary, paying a deposit, thoroughly examining the legal documents and finalizing the transaction before a notary.

Living in Monaco: how to obtain Monegasque residency?

To settle in Monaco, possession of a Monegasque residency card is imperative for foreigners wishing to live there for at least 3 months a year.

The criteria for obtaining residency are the acquisition or rental of real estate, proof of economic self-sufficiency and good character.

- To obtain residency, you need to buy or rent a house or apartment in one of the 7 districts of the Rocher. Alternatively, you can prove that your spouse owns property in Monaco.

- It is crucial to demonstrate financial self-sufficiency by means of a salary, self-employed income, capital validated by a Monegasque bank, or by taking in a spouse or relative.

- Good character is essential and requires the provision of a clean police record extract less than 3 months old, or a similar document from the authorities in the countries of residence for the last 5 years.

Formalities for obtaining the Monegasque Resident Card

To compile the file, various documents are required, such as a copy of the valid passport, the lease contract or deed of ownership of the property, as well as proof of residence on Monegasque soil such as an electricity bill.

Once all the supporting documents have been gathered, the resident card application must be submitted to the Monegasque authorities, either in person at the offices located at Rue Louis Notari, or electronically via the teleservice.

For people from outside the European Economic Area, an application for a settlement visa must be made to the French consulate closest to their last place of residence before submitting the application for a resident card in Monaco.

Living in Monaco requires strict compliance with these conditions in order to obtain Monegasque residency. Once all the steps have been completed, the resident card offers the opportunity to fully enjoy this prestigious and privileged life on the Côte d'Azur.

Why invest in real estate in Monaco: tax advantages

As a well-established tax haven, the Principality offers a series of unique tax advantages that attract investors from all over the world. Here, Monegasque residents are exempt from income tax, property tax and inheritance tax for direct ascendants and descendants (except for registration fees required by the notary's office). This favorable tax environment attracts investors from all over the world.

Income tax exemption

One of Monaco's undeniable strengths is the absence of income tax for Monegasque residents. Individuals benefit from a total exemption from income tax, freeing up their financial potential and enabling them to maximize their earnings.

Please note: individuals of French nationality are, however, required to file their income tax returns in France and are subject to the French tax system, even if they have established their main domicile in Monaco and obtained a Monegasque resident card.

Favorable corporate taxation

Monaco-based companies also benefit from favorable taxation. With a corporate tax rate of just 33.33% on profits earned, they can prosper and grow in a favorable tax environment.

No property or council tax

In Monaco, residents are exempt from property and housing taxes. This absence of local property tax charges considerably eases the financial responsibilities of owners, reinforcing the appeal of investing in Monegasque real estate.

Freedom of succession

Another significant advantage in Monaco is freedom of succession. Residents can pass on their wealth to their heirs without Monegasque inheritance tax (except for registration fees required by the notary's office), offering financial security and simplified estate management.

Financial confidentiality and legal stability

Monaco guarantees rigorous financial confidentiality and legal stability. Respect for the confidentiality of residents' financial information is an essential pillar of Monaco's tax framework, offering investors peace of mind.

Monaco's tax advantages make it a popular destination for individuals and companies looking to optimize their tax situation. The principality offers a favorable investment environment, combining an advantageous tax framework with an exceptional lifestyle. For those looking to take advantage of these unique tax opportunities, investing in Monaco can offer considerable financial benefits.

Advice for investors in Monaco: rely on local expertise

Relying on the expertise of experienced local real estate agents and legal advisors specializing in Monaco real estate is essential to effectively navigating this unique market. Trusting the Sotheby's International Realty network means trusting a guarantor of trust and excellence. With an international reputation, the Sotheby's International Realty network of real estate agencies is your main asset for your real estate projects in Monaco, and anywhere else in the world.

Monaco offers an exceptional real estate ecosystem, but it requires a thorough understanding of its specificities. By surrounding yourself with the right resources and acting prudently, investing in Monaco real estate can be a lucrative and prestigious opportunity.

Need information about investing in Monaco or the assistance of a real estate expert? Don't hesitate to contact us or our partner agency in Monaco, Monte-Carlo-Sotheby's International Realty, specialists in luxury real estate in Monte-Carlo.

Together, our experts will offer you personalized advice for your real estate investments in the Principality of Monaco.