Real Estate: Monaco vs. Neighboring Countries – Detailed Comparison

Published on October 2, 2025 and written by Cyril Jarnias

Real Estate Investment: Monaco vs. Its Mediterranean Neighbors

Real estate investment is often considered a safe bet, but choosing between Monaco, with its prestige and history of economic stability, and its Mediterranean neighbors, rich in cultural diversity and growth potential, can be complex.

Beyond the glitz and glamour that illuminate this princely rock, Monaco offers advantageous taxation and a market decidedly oriented toward luxury, but at what cost? Meanwhile, neighboring countries present a diversity of choices and sometimes surprising profitability for those who can read between the lines.

This article aims to explore various aspects, considering legislation, acquisition costs, and profitability prospects, to guide the savvy investor in their quest for the most informed decision.

Positioning Monaco Against Its Neighbors in Real Estate

Criterion	Monaco	France (French Riviera)	Italy (Liguria)
Average Price per m²	€51,967 (up to >€100,000 for ultra-prime)	Nice: ~€5,000 to €7,000/m² Cannes: ~€8,000 to €12,000/m² Paris: ~€10,500/m²	Genoa / Liguria: often Pinel Law and incentive schemes for new housing.
Transaction Taxation	No income tax or property tax for resident individuals. Low registration fees (~4-6%) No capital gains tax if Monegasque resident.	Transfer duties between 5% and 8% depending on region Possible capital gains tax on real estate Annual property tax	Similar or slightly lower duties than France. Transfer duties around ~2-3%. Lower local taxes

Recent Market Trends:

• In Monaco:
  • Extremely limited supply due to restricted territory.
  • Strong international demand far exceeding available supply.
  • Continuous price increases (+44% in ten years).
  • New projects like Mareterra selling at record prices (several villas exceeding one hundred million euros).
  • Relatively low rental yields compared to the high cost of invested capital.
• In France & Italy:
  • Much broader market thus diversified supply.
  • Significantly lower average prices except for ultra-luxe on the Riviera.
  • Occasional tensions in some attractive cities but not comparable to Monaco’s structurally tight level.

Attractive Factors for Potential Buyers:

• Monaco
  • Exceptional political stability
  • Advantageous tax system (no income tax, no wealth tax)
  • Outstanding quality and security
  • High-end services tailored to the wealthy
  • Recognized international financial center
  • Privileged Mediterranean climate
• France/Italy
  • Rich cultural environment
  • Easier access from abroad
  • Varied architectural styles
  • Less attractive taxation than Monaco but better availability

Availability & Demand:

In Monaco:

“The scarcity of available land, sustained international demand, and extension projects like Mareterra contribute to maintaining strong price pressure.”

“There are not enough new properties to buy.”

On the French Riviera/Liguria:

Supply is abundant compared to Monaco, even if some properties are also rare in the ultra-luxury segment.

Security & Quality of Life:

In Monaco:

Maximum urban security thanks to high police numbers per capita.

Well-maintained environmental quality despite urban density.

In Summary:

The Monegasque real estate market stands out for its world-record prices linked to extremely rare supply, exceptionally favorable tax environment, and unique institutional stability. The French Riviera or Italian Liguria offer attractive settings with more architectural and cultural diversity as well as much lower price levels – without, however, matching Monaco’s exclusive aura or taxation.

Taxation in Monaco Compared to Neighboring Countries

Country	Personal Income Tax	Main Real Estate Taxes	Other Relevant Taxes
Monaco	None (except for French nationals)	No capital gains tax, no wealth tax; VAT applied at 20% (aligned with France); low transfer duties compared to France (about 4.5%)	No wealth tax or recurring property tax for resident individuals.
France	Progressive up to 45%	Real estate capital gains taxed at about 36.2% before allowances; high transfer duties (7-8%); IFI from €1.3M net real estate	Annual property tax and residence tax.
Italy	Progressive up to ~43%	Capital gains taxed between 20-26%; registration duties between 2 and ~9%; annual IMU based on cadastral value	Mandatory annual municipal IMU tax.
Switzerland	Varies by canton (~22-40%)	Tax on real estate gains variable by canton; low or moderate transfer duty; annual wealth tax	Property tax in some cantons.

Key Points of Monaco’s Tax System:

• No income tax for Monegasque residents, except notable exception for French citizens who remain subject to French tax regime.
• Complete absence of wealth taxes such as IFI or ISF, as well as no taxation of capital gains realized by resident individuals upon resale.
• Companies are subject to corporate tax (33.33%) only if more than 25% of turnover comes from outside Monaco.
• VAT is applied at the same rates as in France: standard rate at 20%, with specific thresholds depending on the type and volume of commercial operations.

Specific Tax Advantages for Real Estate Investment in Monaco:

1. No recurring annual taxation like property tax or IFI/ISF unlike France, Italy, or some Swiss cantons.
2. Complete absence of personal taxation during real estate sales (no local residential tax or social contributions).
3. Reduced transfer duties: about 4.5% versus 7–8% in France.

“Investors benefit not only from very light taxation but also from great regulatory stability… The total cost related to taxes during purchase and ownership remains significantly lower than in neighboring countries.”

Concrete Numerical Examples Illustrating These Differences:

Country	Gross Resale Amount (€)	Capital Gain (€)	Applicable Taxation
Monaco	3,000,000	+500,000	€0 – no taxation
France	3,000,000	+500,000	~€181,000 levied (36.2%, excluding duration allowances/social contributions included), + possible IFI during ownership

Initial purchase:

• In Monaco: For a property bought/sold at the same price – notary fees/duties approx. 4.5% i.e., €135,000.
• In France: Duties approx. 8% i.e., €240,000.

Overall Impact on Total Cost and Real Estate Profitability:

The extremely low tax pressure allows for:

• A higher net yield after resale,
• An almost total absence of “tax erosion” linked to annual taxes,
• Better financial predictability thanks to the stable framework.

Legal & Administrative Implications for Foreign Investors:

• Prior obtaining of Monegasque resident status required (justification of sufficient financial resources & housing);
• Rigorous registration with local authorities;
• Possible obligation for certain nationalities (e.g., French) to respect their own national legislation despite physical residence;
• Less administratively complex than Italy/France where multiple declarations and enhanced anti-money laundering compliance are added.

⚠️ Investors should seek specialized advice to optimize their asset structuring according to their nationality and objectives.

The choice between investing in Monegasque real estate versus neighboring countries therefore depends mainly on the applicable personal tax regime and the envisioned project — Monaco offering maximum optimization both in terms of taxation and asset management

Advantages and Disadvantages of Investing in Monaco and Neighboring Countries

Advantages of Investing in Monaco

• Extremely advantageous taxation:
  • No income tax for individuals (except for French nationals subject to specific agreements).
  • Absence of wealth taxes, capital gains tax, and no annual property tax.
  • Reduced or nil inheritance taxes between spouses and direct children.
• International prestige & event attractiveness:
  • Monaco benefits from global prestige thanks to iconic events like the Formula 1 Grand Prix or the Monaco Yacht Show.
  • The principality attracts an international wealthy clientele seeking security, luxury, and discretion.
• Economic and political stability:
  • Robust economy, strict budget management, political stability allowing for long-term planning.
• Exceptional security:
  • Among the lowest crime rates in the world.
  • Omnipresent police ensuring a very safe environment for residents and investors.
• Quality of life & privileged geographical location:
  • Pleasant Mediterranean climate with over 300 sunny days per year.
  • Immediate proximity to Nice, Milan, Geneva thanks to high-end infrastructure (international airport).

Advantages	Concrete Details
Taxation	No income tax or wealth tax; no property tax
Security	Enhanced surveillance; very low incident rate
Stability	Stable governance; solid economy even in uncertain global times
Prestige	Hosting major international events; luxurious image

Potential Disadvantages in Monaco

• Extremely high real estate market cost
  • Average price often exceeding €50,000/m² in high-end residential real estate
  • Limited supply linked to the small territory size
• Restrictions for non-residents
  • Obtaining resident status conditioned notably by a significant bank deposit (at least €500,000) and the obligation to rent or buy a property locally
  • Rigorous administrative procedures
• Significant urban density
  • Very restricted urban space: possible feeling of “suffocation,” few private green spaces
  • Daily life sometimes marked by tourist influx during major events

Real estate prices there are among the highest in the world while supply is naturally limited by the restricted area. The steps to become a resident can discourage some foreign investors not wishing to commit long-term.

Investing in Neighboring Countries (France – French Riviera/Italy)

Advantages

• Generally lower real estate prices compared to those in the Principality
• Greater typological diversity: villas with land, rural houses, or urban apartments according to preferences
• Often relaxed regulations regarding purchase by non-European or international residents
• Easier access to local markets while remaining geographically close to Monegasque dynamism

Disadvantages

• Much less favorable national taxation: varied local taxes depending on municipalities/regions (mandatory annual property tax), possible taxation of rental income/various levies depending on tax status
• National economies potentially less stable in the face of international crises than that guaranteed by the Monegasque Principality
• Variable security depending on precise location in each country/region

Country	Average Prices m²	Taxation	Property Diversification	Stability/Security
Monaco	>€50,000/m²	Very favorable	Rare/luxury supply	Excellent
French Riviera FR/IT	Often <€10,000/m²	Less advantageous	Wide choice	Variable

Choosing between investing directly in Monaco or its surroundings will therefore depend mainly on the available budget, personal asset objectives, as well as expectations related to the desired lifestyle.