Monaco Real Estate Regulations You Need to Know

Published on October 2, 2025 and written by Cyril Jarnias

Monaco: A Unique and Regulated Real Estate Market

Monaco, this gem of the French Riviera, is renowned for its luxury and exclusivity, but behind its glamorous facades lies a complex set of real estate laws and regulations that are crucial to master for anyone looking to invest there.

With one of the most competitive real estate markets in the world, understanding the legal specifics of the Monegasque territory becomes not only a necessity but also an essential advantage.

This article will guide you through the nuances of the legal procedures, ownership conditions, and tax requirements that shape this unique sector, allowing you to navigate this singular regulatory environment with confidence.

Foreigners’ Rights Regarding Real Estate Acquisition in Monaco

Foreigners are allowed to acquire real estate in Monaco, regardless of nationality, including non-European nationals. However, certain specific conditions and administrative procedures must be followed.

Applicable Conditions and Restrictions:

• Non-residents must obtain a residence certificate issued by the Monegasque government before acquiring real estate.
• Foreigners undergo thorough checks regarding their background and financial credibility.
• Acquisition taxes are generally higher for non-residents than for residents.
• There is no strict ban targeting specific countries; no mention indicates preferential conditions based on nationality.

Required Administrative Procedures:

1. Submission of a file including:
   • Valid passport or ID
   • Proof of sufficient funds or bank statements
   • Monegasque residence certificate (for non-residents)
2. Signing of the preliminary contract then final deed before a notary in Monaco
3. Payment of registration fees or purchase tax

Comparative Table of Rights by Status:

Status	Right to Purchase	Tax Rate	Rental Freedom	Legal Protection
Monegasque Resident	Yes	Standard	Full	Complete
Foreign Resident	Yes	Standard	Full	Complete
Foreign Non-Resident	Yes (with cert.)	Increased	Full (regulated)	Complete

Differences with Monegasques:

The main inequality concerns taxation: non-residents pay a higher tax upon purchase, while legal protection in real estate matters remains the same regardless of the owner’s status.

No specific additional rights are granted to Monegasques apart from the advantageous tax regime reserved for residents.

List of Additional Obligations:

• Mandatory declaration of rental income generated in the principality, even though Monaco does not levy personal income tax.
• Strict compliance with the local legal framework regarding seasonal or long-term rentals.

The restrictive rules primarily aim to maintain rigorous control over the highly attractive and secure real estate market, while preserving its exclusivity.

The notable absence of discrimination between countries strengthens international appeal but also increases upward pressure on prices already among the highest in the world: this can structurally limit access to the local market for certain economic profiles while maintaining a wealthy and international clientele.

Real Estate Laws and Regulations: What You Need to Know

The real estate legal framework in Monaco is particularly structured and aims to preserve the market’s specificity while ensuring the protection of various stakeholders. The main laws governing the purchase, sale, and rental of real estate are rigorously enforced, with notable particularities concerning residential rentals.

Type of Operation	Main Regulation	Specificities
Purchase/Sale	Monegasque Civil Code	Process secured by mandatory notarial deed. Absence of transfer duties for residents; for non-residents, specific conditions possible depending on tax status.
Residential Rental	Law No. 1235 and Law No. 887	Strict regulation for certain older buildings (Law 1235): regulated rents, automatic lease renewal, minimum 6-year term. Law 887: free rents in recent or new properties, minimum 6-year term without automatic renewal.

Rights and Obligations of Owners

• Comply with the legal framework applicable to the building type (protected older or free).
• Mandatory declaration in case of vacancy under certain laws.
• Specific notice to respect when reclaiming the property (notably extended notice in case of eviction in protected older buildings).

Rights and Obligations of Tenants

• Peaceful enjoyment of the leased property.
• Respect legal notice periods when leaving (generally three months).
• Quasi-automatic renewal under certain protective regimes.

Concrete Example:

• Under Law No. 1235: the owner must justify personal reclamation if they wish to recover their property; the tenant then benefits from a right to remain with automatic lease renewal.
• Under Law No. 887: greater contractual freedom between parties but declarative obligation in case of prolonged vacancy.

Competent Government Agencies/Institutions

• The Housing Department oversees compliance with rental regulations.
• The National Council plays a legislative role and can intervene on any reform impacting this sector.

Real Estate Taxation

Applicable Taxes

Operation	Tax/Duty
Real Estate Purchase	Fixed duties or exemptions under conditions for residents
Property Income	Not directly taxed except in particular situations
Real Estate Capital Gains	Generally not taxed except specific exceptions for companies

There is no income tax or wealth tax for individuals in Monaco; however, certain transactions involving companies or non-residents may be subject to taxation depending on their personal tax situation.

Recent Modifications with Significant Impact

In April 2025, a law allowed:

• The exceptional declassification of a parcel initially part of the public domain so a private project could proceed (planned realization: residential building with simultaneous creation of vegetated public spaces).
• This operation was accompanied by substantial financial compensations paid to the State as well as various compensatory transfers allowing the future creation by the State of up to 90 additional public housing units.

This evolution demonstrates:

• An increased willingness of Monegasque authorities to reconcile controlled private development and gradual increase of public housing accessible to residents.
• Regular adjustments aiming for either better transparency or fine adaptation to demographic challenges.

Key Takeaway
The Monegasque real estate market is framed by a complex but effective set of rules protecting both investors and individuals. Legislation regularly evolves to ensure economic stability, social justice, and international appeal while maintaining a very high level of legal requirement.

Understanding Local Taxation in Monaco

The Monegasque tax regime is distinguished by a complete absence of income tax for individuals, except for French nationals who remain subject to French tax legislation under bilateral agreements. This principle has applied since 1869 and makes Monaco a preferred destination for wealthy real estate investors seeking to reduce their tax burden.

Main Advantages of the Monegasque Tax System:

• No income tax
• No wealth tax
• No property tax or residence tax
• Absence of taxation on real estate capital gains realized by individuals

This policy attracts a growing number of international residents and investors, as they can receive salaries, rental income, or capital gains without local tax deductions.

Specific Taxes in the Real Estate Context

Tax/Duty	Applicability	Rate or Modalities
Transfer Duties	For each real estate transaction	Approximately 4–6% of price
VAT (on new properties)	On new real estate purchases	20% (aligned with France)
Registration Fee	On certain legal acts	Variable
Inheritance Tax	Depending on degree of kinship	From 0% to 16%

Key Points Regarding These Duties:

• Transfer duties represent a significant cost during real estate purchases/sales.
• Inheritances between direct descendants are exempt, but can be taxed up to 16% between non-relatives.
• There is no recurring tax on property ownership (no equivalent to the French property tax).

Impact on the Local Real Estate Market

The near-total absence of direct taxation makes Monaco extremely attractive. This causes:

• Strong international demand, particularly from high-net-worth individuals seeking tax optimization.
• Some of the highest square meter prices in the world: supply is limited while demand remains sustained.
• A high total cost to access ownership or even rent a property: high rents and initial prices heavily influenced by this competitive pressure.

Implications for Non-Resident Owners

Non-residents also benefit from the advantageous regime: they do not pay recurring local taxes nor on their potential capital gains from sales. However, they must pay duties on transactions and potentially bear taxation in their home country according to international conventions.

Practical Consequences for the Foreign Investor:

• High initial cost due to transaction-related duties
• Optimized net rental profitability thanks to complete absence of local taxation
• No specific declarative obligation towards Monaco outside acquisition/transfer

This tax architecture greatly contributes to the dynamism and scarcity of the Monegasque real estate portfolio while continuing to attract foreign capital and new residents seeking legal stability and asset optimization.

Monegasque Property Owners’ Rights: Everything You Need to Know

Fundamental Rights of Real Estate Owners in Monaco

Real estate owners in Monaco benefit from the fundamental right of private property, protected by Monegasque law. This right includes:

• The right of exclusive use: possibility to occupy, use, and freely enjoy the real estate, subject to compliance with local regulations.
• The right of management: total freedom in managing the property, including maintenance, renovation, or interior layout (while respecting urban planning and co-ownership rules).
• The freedom to rent or sell one’s property, whether for seasonal or long-term rental. This latitude applies to residents and foreigners alike.

Right	Description
Usage	Occupy and use the property according to one’s needs
Management	Maintain, renovate, arrange (within limits set by law/regulations)
Rental	Freely rent (subject to local leases)
Sale	Transfer one’s property at any time

Local Specificities

Monaco applies certain specific regulations concerning real estate acquisition and management:

• Foreign owners benefit from the same rights as nationals.
• Fees are associated with transactions: registration fees (generally 4.5% to 6.25% depending on transaction type), notary fees (~1.5%), with increased transparency during acquisitions via foreign companies.
• Rental income is not taxed locally but must be declared in the fiscally competent country.
• The rental market distinguishes “free” and “regulated” sectors; each sector has its own rules regarding rent setting and lease renewal.

Legal Protections Offered

Foreign owners benefit from the same legal protection as Monegasque nationals in matters of real estate property. Monegasque law guarantees respect for private property and offers effective recourse in case of dispute.

This includes:

• Amicable or judicial resolution in case of disputes with a neighbor (excessive noise, encroachment on land…)
• Legal obligation to maintain one’s property, under penalty of possible collective actions via co-owner associations
• In co-ownership: strict application of internal regulations; recourse to the association then to court if necessary

Asserting One’s Rights / Available Recourses

In case of infringement of their rights:

• Contact the association manager for any question related to co-ownership.
• Appeal to the competent court to settle a dispute concerning abnormal neighborhood disturbance or contractual non-compliance.

Accelerated procedures exist so that urgent situations are treated quickly.

Concrete Examples

An owner who suffered infiltration from the upper unit obtained compensation after intervention by the association manager then a judicial decision condemning the responsible party to necessary repairs.

In case of unjustified refusal by a neighbor regarding a project compliant with internal regulations (for example discreet installation of air conditioning), the owner can seize the court which generally rules quickly given the importance placed on strict compliance with collective regulations.

In Monaco, these guarantees ensure both security and attractiveness for investing serenely.