Published on and written by Cyril Jarnias
Moving to Monaco or investing in real estate there is a dream for many French people. No income tax, no property tax, no local wealth tax (IFI), no capital gains tax on resale… On paper, the Principality looks like a tax haven for property owners. But the moment a French passport enters the picture, the scenery changes dramatically.
Before buying in Monaco, a French national must distinguish three tax realities: Monegasque taxation, French obligations as a national, and French taxation on properties located in France. The landscape is attractive but tricky.
This article provides a complete, clear-French breakdown of real estate taxation in Monaco for French nationals: purchase, ownership, resale, inheritance, holding structure, interaction with the French wealth tax (IFI) and French capital gains taxes. The goal: to enable informed decision-making and avoid irreversible mistakes.
The Basic Framework: What Monaco Taxes… and Especially What It Doesn’t Tax
To understand what happens for a French national, we must first start with the standard regime, the one that applies to any non-French resident in Monaco.
Monaco has built itself since the 19th century on a simple principle: no direct taxation of individuals. The absence of income tax has been in place since 1869 and was formalized by a sovereign ordinance in 1964. This results in an impressive list of what the Principality does not levy.
A Monegasque individual property owner pays virtually nothing locally
For a “standard” (non-French) resident, the situation is as follows:
| Type of tax or levy | Monaco – Non-French individual resident |
|---|---|
| Income tax | None |
| Real estate capital gains tax | None |
| Wealth tax or local IFI | None |
| Annual property tax (taxe foncière) | None |
| Occupancy tax / residence tax | None |
| Recurring tax on property ownership | None |
| Gift / inheritance tax in direct line | 0% |
In practice, an individual who owns an apartment in Monaco only has to bear, each year: condominium fees and insurance.
Condominium charges, maintenance costs, insurance, and, where applicable, a lease duty of 1% of the annual rent plus charges in case of rental.
Rental income from a Monegasque property is not taxed locally. And the resale, for an individual, triggers no capital gains tax in Monaco.
Real estate taxation concentrated at the time of the transaction
In the absence of recurring taxation, Monaco concentrates its real estate revenues at the time of property transfers: registration duties, notary fees, VAT on new buildings or certain land.
Real estate acquisition costs for an individual buyer or via a transparent Monegasque civil company are typically 6% of the purchase price, including duties and notary fees.
We’ll come back to this in more detail, because the choice of acquisition structure (direct purchase, via a Monegasque civil company (SCI), or a foreign company) is a key point for a French national.
The Trap of the French Passport: What the 1963 Tax Treaty Says
The vast majority of misunderstandings stem from a text that many would-be tax exiles have skimmed over: the tax treaty signed between France and Monaco on May 18, 1963.
The principle: A French national in Monaco remains, for Paris, a French taxpayer
Article 7 of this treaty provides that a French national domiciled in Monaco is, in most cases, considered a French tax resident and taxed as such on all of their income and assets. The stated intention was to prevent a massive exodus of French taxpayers to the Rock.
In practice, this means that:
A French national living in Monaco does not benefit from the absence of Monegasque income tax: they remain subject to French income tax, capital gains tax, and the wealth tax (IFI) under the treaty, even if they live and work in Monaco.
The treaty introduced several dates and transitional regimes, which add a layer of complexity.
Overview of the treatment of French nationals in Monaco
Several texts and sources specify the key dates. The summary is as follows:
| Situation of a French national in Monaco | Main French tax consequence |
|---|---|
| Resident in Monaco before mid-October 1957 | In principle outside the treaty’s scope, not treated as a French tax resident under the agreement, subject to old conditions of habitual residence |
| Resident in Monaco before October 1962 with 5 years of presence | May benefit from an exemption under the treaty, very marginal status today |
| Married before 01/01/1986 to a foreign spouse residing in Monaco | Possible exception, under conditions, from continued French taxation |
| French national who became a Monaco resident after these dates | Considered a French tax resident, taxed in France on worldwide income and real estate assets |
For a French national considering moving to Monaco today, it must be accepted that they will remain French tax resident for:
– income tax;
– capital gains on asset disposals, including real estate;
– the wealth tax (IFI) on their real estate assets (in France but also abroad, depending on the case).
In other words, moving to Monaco does not “erase” French taxation.
Buying Property in Monaco as a French National: What Is Truly Advantageous… and What Is Not
Once this framework is set, we can coldly analyze the benefit – or not – of buying property in Monaco for a French national.
Advantage #1: No annual Monegasque tax on ownership
On the purely Monegasque side, the French national enjoys the same advantage as any other resident: no property tax (taxe foncière), no occupancy tax (taxe d’habitation), no recurring local tax on property ownership.
The comparison with France is striking. On the French Riviera, a property owner pays every year:
| Tax or levy in France (for reference) | Order of magnitude / main rule |
|---|---|
| Property tax (taxe foncière) | Average around €1,000/year in 2024; often €1,000 to €3,000/year for a second home |
| Surcharge on occupancy tax for second homes | 5% to 60% additional in high-demand areas |
| Wealth tax on real estate (IFI) | Above €1.3 million in net real estate assets, progressive |
| Real estate capital gains tax | Taxed, unless exempt (primary residence, holding period, etc.) |
In Monaco, all these recurring charges do not exist. For a significant real estate portfolio, saving each year on property tax, second home surcharge, and French IFI on properties located in Monaco can represent very substantial amounts.
Advantage #2: No Monegasque tax on rental income or local capital gains
On the strictly Monegasque level, a French national who rents out a property in Monaco:
An individual investor who rents out a real estate property in Monaco pays no local tax on the rents collected. Furthermore, upon resale of that property, they will pay no tax on the capital gain realized in the Principality, which constitutes a significant tax advantage.
However, beware: this does not prevent France from claiming its share, in particular via income tax and, potentially, the IFI. The fact that Monaco does not tax does not erase the tax claim from Paris, especially when the taxpayer is French and remains deemed a French tax resident under the 1963 treaty.
Major limitation: France continues to tax the French national on their income and property
For a “standard” French national living in Monaco, France:
– considers them a French tax resident;
– applies income tax on all their income, including foreign-source income;
– applies the IFI as soon as their net real estate assets exceed €1.3 million.
The location of the property in Monaco can influence the base for inheritance and gift taxes in France, in accordance with the 1950 treaty on death duties.
In summary, buying property in Monaco for a French national has two sides:
– Very favorable from the standpoint of local Monegasque taxation (no ownership tax or local capital gains tax, very light inheritance taxes);
– Neutral or constraining from the French tax standpoint, which continues to apply by virtue of nationality and the 1963 treaty.
The overall interest therefore depends on the structure of the assets, the location of other assets, the significance of income, and how inheritance is organized.
How Much Does Buying Property in Monaco Cost: Duties and Fees by Structure
From a strictly transactional standpoint, Monegasque taxation depends heavily on the acquisition structure. Again, this choice is not neutral for a French national, particularly with regard to inheritance.
Direct purchase or via a Monegasque civil company (SCI)
The simplest path – and the least costly in registration duties – remains direct purchase by an individual or via a transparent Monegasque civil company (SCI or SCP meeting certain conditions).
For so-called “secondary market” properties (resales):
| Type of buyer | Registration duties (excluding notary) |
|---|---|
| Individual or qualifying Monegasque SCI | 4.5% to 4.75% of the price or value |
| Other companies (non-qualifying) | 6.5% to 7.5% of the price or value |
For an individual or an eligible Monegasque SCI, the typical breakdown is:
– transfer duties around 4.5–4.75%;
– notary fees close to 1.5%;
– i.e., a total entry cost around 6% of the purchase price.
For a new property (off-plan VEFA, building delivered less than 5 years ago), sold by a developer subject to VAT, the logic changes:
– VAT at 20% is included in the sale price;
– registration duties are greatly reduced (around 1%) for an individual or a transparent Monegasque SCI;
– notary fees remain around 1.5%.
Thus, on a new development, the additional registration cost is very contained, which can partly offset the price premium of new construction.
Purchase via foreign companies or opaque structures
For historical reasons of confidentiality or optimization, some investors have used foreign (offshore) companies to buy in Monaco. The tax regime is prohibitive:
| Acquisition structure | Approximate registration duty rate |
|---|---|
| Foreign company with an authorized representative in Monaco | ≈ 7.5% |
| Foreign company without a representative | ≈ 10% |
Added to these duties are notary fees and, potentially, specific duties upon the resale of the company shares.
For a French national, these arrangements add complexity on the French side: tax transparency and a possible annual 3% tax on French real estate. They require extreme caution and very specialized advice.
Summary of entry costs in figures
The entry costs in Monaco can be summarized as follows:
| Buyer profile | Duties + notary (approximate) | Main remarks |
|---|---|---|
| Individual / Monegasque SCI – resale | ≈ 6% | 4.5–4.75% duties + 1.5% notary |
| Individual / Monegasque SCI – new | ≈ 2.5% | 1% duties + 1.5% notary, VAT included in price |
| Foreign “opaque” company | ≈ 9–11% | 7.5–10% duties + 1.5% notary |
For a French national, starting with a direct acquisition or via a well-structured Monegasque SCI is often the most straightforward and best-suited path for a long-term wealth planning approach.
Real Estate Capital Gains: When France Taxes a Monaco Resident
A crucial point for French nationals: while Monaco does not tax real estate capital gains for individuals, France, for its part, does not give up taxing its nationals, nor the disposal of properties located in France.
Two cases must be distinguished: the sale of a property located in France and the sale of a property located in Monaco.
Sale of a property in France by a Monaco resident: residence is no protection
The basic rule of French law is simple: “the property is taxed where it is located.” Residing in Monaco confers no exemption on a property located in France. This is a critical point often misunderstood.
Two categories of sellers exist:
1. Non-French resident of Monaco (e.g., British, Italian, American); 2. Resident of Monaco of French nationality.
Non-French residents of Monaco: non-resident regime
A Monegasque resident who is not French is treated, for a French property, as a non-resident outside the EU/EEA:
Summary of rules applicable to non-residents when selling real estate in France
Capital gain taxed at 19% (non-resident income tax rate) after applying allowances for holding period, in accordance with Article 244 bis A of the French General Tax Code (CGI).
Social security contributions of 17.2% applicable, except for rare exceptions related to social security coverage.
Progressive surcharge starting from €50,000 in gain, with a maximum rate of 6% beyond €260,000.
Form 2048-IMM to be filed at the time of the notarial deed to declare the capital gain.
Obligation to appoint an accredited tax representative if the price per seller exceeds €150,000, unless exceptions apply.
Everything is withheld at source by the notary at the time of sale. The seller generally does not have to file any further declaration for this capital gain.
French residents of Monaco: regime… of French residents
Paradoxically, the situation is technically more “favorable” for a French national in Monaco who sells a French property. Under the 1963 treaty, they are treated as a French tax resident for this transaction:
– they are not subject to Article 244 bis A (non-residents);
– they do not suffer withholding at source at the time of the act;
– they do not need a tax representative;
– the capital gain is calculated as for a French resident, with the same allowances for holding period and the same exemption rules;
– the declaration is made via Form 2074 attached to their income tax return the following year.
Concretely, they benefit in particular from:
The property benefits from an income tax exemption after 22 years of ownership, and a total exemption from social security contributions after 30 years. Additionally, if it was your primary residence in France before moving to Monaco, it may be exempt under normal conditions.
Added to this are any surcharges on large capital gains, identical to those borne by a resident of France.
This difference in treatment has a practical consequence: for a French real estate asset held for a very long time, a French national in Monaco is, solely on the capital gain, better off than a non-French national in Monaco, because they benefit from the favorable regime for French residents.
Sale of a property located in Monaco by a French national
On the sale of a Monegasque property, Monaco does not tax the individual’s capital gain. France, however, may consider the capital gain as taxable income subject to French income tax, since the taxpayer is treated as a French tax resident under the treaty.
The mechanism is then that of capital gains on securities or real estate from a foreign source, declared in France, with a key point however: the bilateral treaty did not specifically address this case, and the absence of withholding or Monegasque taxation leaves France free rein.
In practice, this point requires specialized advice, because the interaction between French domestic law and treaties is not trivial for properties located in the Principality.
Wealth Tax (IFI), Real Estate Assets, and French Residents in Monaco
Another sensitive point: the French real estate wealth tax (IFI). For a non-French resident of Monaco, there is no Monegasque IFI, and the French IFI applies, at best, only to their French real estate assets if they are liable as a non-resident.
For a French resident in Monaco, the logic is different.
French nationals in Monaco and the IFI
A French national domiciled in Monaco who falls within the scope of the treaty is subject to the French IFI as if they resided in France. In practice:
The IFI applies to net real estate assets exceeding €1.3 million as of January 1. The base may include properties in France and, depending on the case, abroad. The declaration is made via Form 2042-IFI, filed either separately or with a French income tax return, depending on whether there is taxable income in France.
This can be summarized as follows:
| Resident in Monaco | Monegasque IFI | French IFI on properties in France | French IFI on properties outside France* |
|---|---|---|---|
| Non-French, not a French tax resident | No | Yes (if > €1.3M) | No (in principle) |
| French national subject to the 1963 treaty | No | Yes (if > €1.3M) | Yes / potentially, depending on CGI rules and the treaty |
The exact scope for certain profiles being technical, a personalized analysis is essential.
In any case, a French national with significant wealth considering buying in Monaco must integrate that:
– they will never pay a Monegasque IFI (it does not exist);
– but they risk remaining fully within the scope of the French IFI.
Inheritance and Transfers: The 1950 Treaty / Monegasque Regime Duo
This is undoubtedly the area where Monaco offers, even for a French national, the most significant wealth planning opportunities, thanks to another treaty: the Franco-Monegasque convention of April 1, 1950 on inheritance duties.
Inheritance duties in Monaco: very light in direct line
The Monegasque inheritance duty regime is simple and attractive:
| Relationship between deceased and heir | Inheritance duty rate in Monaco |
|---|---|
| Spouse or child (direct line) | 0% |
| Partner in a Monegasque civil union | 4% |
| Brother / sister | 8% |
| Uncle, aunt, nephew, niece | 10% |
| Other more distant relatives | 13% |
| Person with no family relationship | 16% |
The duties only apply to assets located in Monaco or having their legal “seat” in the Principality (real estate, Monegasque bank accounts, shares in Monegasque companies, etc.).
The 1950 treaty: key to allocation between France and Monaco
The convention of April 1, 1950 allocates the right to tax inheritances involving France and Monaco. Some essential principles:
Real estate is taxed only in the State where it is located. Tangible movable property (excluding ships and aircraft) is taxed where it is physically located on the day of death. Securities (shares, bonds, receivables) are in principle taxed in the State of the deceased’s last domicile, if that domicile is in France or Monaco.
Important consequence: a property located in Monaco is never subject to French inheritance duties as real estate. It falls exclusively under Monegasque law, even if the deceased or the heirs are French.
Special case of Monegasque civil companies holding French real estate
A technical but structuring point for certain arrangements: the French Court of Cassation ruled in 2015 that, under Article 6 of the 1950 convention, shares in a Monegasque civil company (SCI) holding real estate in France may fall under the exclusive jurisdiction of Monaco for inheritance duties, even if under French domestic law the company would be considered as “predominantly French real estate.”
In other words, according to this reasoning:
– France would treat the property as held by a company;
– the convention gives jurisdiction to the State of the deceased’s domicile (here Monaco) to tax the company shares;
– Monaco then applies its inheritance duty regime (0% in direct line).
The interest, for a French national who has long resided in Monaco, is obvious: structuring the holding of French real estate via a Monegasque SCI can, under certain conditions, allow avoiding French inheritance duties which can reach up to 45% in direct line.
This mechanism is, however, delicate, highly scrutinized, and its implementation requires:
– strict compliance with the conditions of the convention;
– ensuring effective and long-standing residence in Monaco;
– taking into account evolving case law and risks of challenge.
Ownership in France While Living in Monaco: The Constant Eye of the French Tax Authority
For a French national residing in Monaco, buying or keeping a property in France means, from a tax perspective, behaving like any French taxpayer or, failing that, like any non-resident. Some key points are mandatory.
Property tax, second home surcharge, filing obligations
A property held in France, even by a Monaco resident, bears: the real estate wealth tax (IFI).
– property tax (taxe foncière), annual, steadily rising;
– sometimes a surcharge on the occupancy tax for second homes, from 5 to 60% in high-demand areas;
– new filing obligations (declaration of property occupancy via the “Manage my real estate properties” section on impots.gouv.fr).
Since 2023, every owner of a dwelling in France (including non-residents and Monaco residents) must declare the occupancy status of each property: primary residence, secondary, rental, vacant, and identity of adult occupants.
– is done online via the tax account;
– must theoretically be updated in case of change of situation;
– is monitored, with possible fines of €150 per property for omissions.
Capital gains on French properties: inevitable taxation
As seen above, France systematically taxes capital gains from the disposal of real estate located on its territory, whether realized by:
– a French resident (or assimilated, such as a French national in Monaco under the treaty);
– a non-resident (including a non-French national in Monaco).
The “protection” of Monaco is therefore non-existent on this point. Real estate investment in France by a Monaco resident must be analyzed with the same precautions as for any non-resident investor.
Structuring Ownership: Direct Purchase or via a Monegasque SCI?
For a French national planning to buy in Monaco (and possibly alongside on the French Riviera), a question quickly arises: should I buy directly or via a Monegasque civil company?
Advantages of the Monegasque SCI for a Monaco resident
The Monegasque SCI offers several advantages in a wealth planning and inheritance context:
In France, inheritance taxation in direct line can reach 45%, compared to 0% in Monaco.
Nevertheless, beware:
– regarding inter vivos gifts (gift of SCI shares), the 1950 convention does not cover everything: French gift tax rules may reassert themselves;
– France has specific rules for companies with a predominant real estate nature, particularly under domestic law, and may attempt to reclassify certain arrangements;
– if the SCI holds properties in France, the annual 3% tax on entities holding French real estate may apply if no transparency declaration is made.
The French 3% tax: a risk for opaque structures
Any entity, French or foreign, that holds French real estate may be subject to an annual tax of 3% of the market value of the properties, unless:
A foreign entity must be established in a state that has an administrative assistance agreement with France and must file the transparency declaration (form 2746) each year to disclose its beneficial owners.
Monegasque companies that hold real estate in France are therefore potentially within the scope of this tax, but can opt out by complying with transparency obligations.
For a French national, using a Monegasque SCI therefore requires:
– perfect transparency vis-à-vis the French tax administration;
– a legal organization consistent with the treaties;
– a long-term vision for inheritance, more than short-term optimization.
Who Truly Benefits from Monaco, Tax-Wise, on Real Estate?
Putting all these rules together, one conclusion emerges: the Monegasque eldorado does exist… but above all for non-French nationals.
Profile that fully benefits from the Monegasque regime
The profile that best exploits the real estate taxation of the Principality is typically:
– non-French (e.g., Italian, British, Swiss, American, etc.);
– very high income or very high net worth (UHNWI resident);
– holding a significant part of their wealth in financial assets and real estate located in Monaco or outside France.
On the personal taxation front, almost nothing
Tax profile
The special, ambiguous case of the wealthy French national
For a wealthy French national, the reality is more nuanced:
– they do not pay tax in Monaco, true, but continue to pay income tax and IFI in France, except in rare exceptions;
– their French-source income (dividends, rents, capital gains) remains fully taxed in France;
– their capital gains on French real estate are taxed in France as if they lived there.
On the other hand, they benefit from:
In Monaco, there is no taxation on real estate properties located there. The inheritance regime is very favorable for Monegasque assets, especially reinforced by the 1950 treaty for certain structures like a Monegasque SCI holding French real estate, under conditions. Moreover, the absence of affiliation to the French social security system results in exemption from French social security contributions on most investment income.
The question is therefore not whether Monaco “erases” French taxation – it does not – but whether it allows relocating part of the assets into an environment where:
– real estate ownership is not eroded each year by property tax, second home surcharges, and local wealth tax;
– transfer in direct line is done at 0% on Monegasque assets;
– the proceeds of certain capital gains, once taxed in France, can be reinvested and grow in an environment without additional friction.
Before Buying: Verify Three Key Points
For a French national considering a real estate purchase in Monaco, three checks are essential before signing a preliminary contract.
1. Your exact status under the 1963 treaty
It is not enough “to live in Monaco” to no longer be taxable in France. The French tax administration will look at:
– your nationality;
– the date of your move to Monaco;
– your personal and economic ties to France.
In most cases, a French national moving to Monaco remains liable for French tax on their worldwide income and must pay the IFI. This directly impacts the marginal tax rate and filing obligations.
2. The location and structure of your overall real estate portfolio
Before buying a property in Monaco, it is crucial to map out:
– your properties already in France (residences, rental investments, SCIs, etc.);
– your acquisition plans in France or elsewhere;
– the relative weight of real estate versus other assets (financial, professional).
This mapping will make it possible to decide:
– whether a purchase in Monaco is mainly justified as a residence, as an inheritance tool, or as wealth diversification;
– whether it is relevant to use a Monegasque SCI for certain assets, especially with a view to inheritance, and under what conditions.
3. Long-term inheritance strategy
The great strength of Monaco, for a French national, is often less the immediate tax savings than the quality of the inheritance framework over the very long term:
It is possible to benefit from a 0% inheritance duty exemption between spouses and children on Monegasque assets. Furthermore, under certain conditions, a Monegasque structuring can allow certain French assets to escape French inheritance duties, which requires a fine-tuned interplay with the 1950 treaty.
However, a good inheritance strategy is prepared well in advance of retirement or death. Buying in Monaco “for yourself” without factoring in the transmission issue is often a missed opportunity.
Conclusion: Monaco – A Tax Mirage for the French or a Genuine Wealth Tool?
For a French national looking at the Principality through the lens of pure tax exile, the answer is clear: Monaco does not eliminate French tax. The 1963 treaty locks in most of the income tax, IFI, and French capital gains taxes.
On the other hand, for a French national who thinks like a long-term wealth planner, Monaco offers several powerful levers:
Monaco offers the absence of property tax, local IFI, and real estate capital gains tax. Inheritance duties in direct line on Monegasque assets are very favorable. Structures like the Monegasque SCI or the 1950 treaty can, under strict conditions, greatly reduce French inheritance duties on properties located in France.
The real challenge, for a French national wanting to buy in Monaco, is therefore not to “flee the taxman,” but to restructure their wealth within a coherent cross-border framework, where:
– you accept that France continues to tax certain flows (income, French capital gains, IFI);
– you fully exploit the areas where Monaco has a decisive advantage (ownership, transfer of Monegasque assets, civil structuring);
– everything is coordinated with careful management of treaties and filing obligations on both sides.
On this condition, real estate taxation in Monaco ceases to be a mirage for the French and becomes a genuine tool for wealth strategy… provided it is approached with clarity, legal precision, and specialized guidance.
A wealth planning project or a question? Contact us now to speak with a wealth management expert.
Disclaimer: The information provided on this website is for informational purposes only and does not constitute financial, legal, or professional advice. We encourage you to consult qualified experts before making any investment, real estate, or expatriation decisions. Although we strive to maintain up-to-date and accurate information, we do not guarantee the completeness, accuracy, or timeliness of the proposed content. As investment and expatriation involve risks, we disclaim any liability for potential losses or damages arising from the use of this site. Your use of this site confirms your acceptance of these terms and your understanding of the associated risks.
Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
