Published on and written by Cyril Jarnias
Nestled between sea and mountains, Monaco stands as an essential gem for investors seeking an extraordinary second home. While people often think of its iconic skyscrapers or famous rock, the secondary residence market in this principality is now drawing attention for its dynamism and exceptional opportunities.
With some of the highest square meter prices in the world, this microstate offers much more than luxury with its prestigious living environment and attractive tax system. For buyers in search of a prestigious retreat or a safe investment, understanding the specifics of the local market proves essential to seize the best opportunities.
Reasons to Invest in Monaco
Monaco attracts numerous investors and wealthy residents thanks to its unique economic environment and exceptional living conditions.
| Economic Assets | Description |
|---|---|
| No Income Tax | Monegasque residents (excluding French nationals) are not subject to income tax, wealth tax, or personal capital gains tax. There are also no local taxes or withholding taxes on salaries and investments. This advantageous tax system promotes wealth preservation. |
| International Financial Center | Monaco is recognized as a major banking center, with strict regulations ensuring transparency and security of financial transactions. Its financial hub attracts private and institutional investors seeking stability. |
| Stable Currency (Euro) | The use of the euro ensures great monetary stability for international financial and commercial operations. |
Advantages Related to the Political and Regulatory Framework:
- Remarkable political stability, ensured by a strong government under the authority of the Sovereign Prince.
- Attractive regulatory framework for foreign investments: simplified procedures for company creation, no major obstacles to real estate acquisition by non-residents.
Exceptional Quality of Life:
- Maximum Security: Monaco ranks among the safest countries in the world thanks to a modern, omnipresent yet discreet police presence.
- Mild Mediterranean Climate, offering over 300 sunny days per year.
- Modern Infrastructure: optimized road networks, world-renowned marina, international heliport connecting to Nice in 7 minutes.
- Highly specialized medical services; prestigious international schools.
Culture & Prestigious Events That Enhance Attractiveness:
“The Monegasque cultural calendar is punctuated by major international events such as the F1™ Grand Prix, the Monte-Carlo Rolex Masters (tennis), Ballets & Opera at the Grimaldi Forum, and the Yacht Show… These gatherings attract entrepreneurs, celebrities, and enthusiasts from around the world every year.”
Other Distinctive Elements That Make Monaco a Privileged Location for a Second Home:
- Michelin-starred Gastronomy
- High-End Shopping
- Direct Access to Alpine Resorts
These combined characteristics offer foreign investors not only tax protection but also a refined lifestyle in a secure, cosmopolitan environment.
Good to Know:
Investing in Monaco offers undeniable advantages due to its absence of income tax and its status as a privileged financial center with a stable currency, ensuring strong economic appeal. The Principality’s political stability and regulatory framework favorable to foreign investments encourage investor confidence. Its exceptional quality of life, enhanced by optimal security, a pleasant Mediterranean climate, and modern infrastructure, makes it a sought-after location for a second home. Moreover, Monaco captivates with its rich culture and iconic events such as the Formula 1 Grand Prix, attracting globe-trotting investors eager to immerse themselves in a luxurious and dynamic lifestyle.
Where to Invest in Secondary Residences
Key Factors Influencing the Secondary Residence Market in Monaco:
- Location: The extreme scarcity of land in Monaco, with an area of less than 2 km², makes each neighborhood particularly coveted. Areas near the waterfront or with panoramic views remain the most sought-after.
- Sustained Demand: International demand remains strong, particularly driven by wealthy buyers seeking an attractive tax environment and secure surroundings. This dynamism is accentuated by the arrival of a younger generation (30-40 years old), refreshing the traditional clientele.
- Real Estate Price Evolution: Despite a temporary slowdown observed in some segments of the international market, the high-end secondary residence sector in Monaco has seen significant growth. In 2024, total sales volumes reached an absolute record with €5.8 billion exchanged and a notable increase (+21%) in the number of transactions compared to the previous year.
| Factor | Impact on the Monegasque Market |
|---|---|
| Location | High valuation in central neighborhoods and along the coast |
| Demand | Consistently higher than available supply |
| Price per m² | Among the highest in the world; recent upward trend |
Most Sought-After Areas for Investment:
- Carré d’Or (Monte-Carlo)
Iconic neighborhood with prestigious addresses around the Casino; offers stability and high appreciation potential. - Fontvieille & Mareterra (new maritime extension)
Fontvieille attracts for its relative calm and sea views; Mareterra generated a surge in new sales thanks to recently offered apartments/villas. - Larvotto
Area sought for its immediate proximity to the renovated beach and its recent buildings offering spacious terraces.
Recent Statistics on Market Trends:
- In 2024, official launch of Mareterra: +110 apartments & +10 villas added to the residential real estate portfolio.
- Total transaction volume: historic record with nearly €5.8 billion exchanged in the Principality (+21% vs. 2023).
- New construction sales now represent up to 21% of the annual total.
Practical Guide to Efficiently Investing in Secondary Residences in Monaco
Evaluating investment opportunities in Monaco’s exclusive secondary residence market requires an in-depth analysis of several essential factors:
- Location
- Prioritize sought-after neighborhoods (Carré d’Or, Larvotto, Fontvieille) where demand remains strong and property value appreciation has historically been high.
- Consider new projects like Mareterra that expand supply but remain rare given persistent international demand.
- Local Market Trends
- The Monegasque market remains marked by chronic undersupply despite some recent additions (Mareterra project), maintaining price pressure and favoring liquidity of high-end properties.
- Transaction volumes regularly reach records thanks to international influx and limited new constructions.
- Monegasque Real Estate Legislation
- Legislation strictly regulates seasonal rentals and imposes certain rules regarding occupancy, leases, and tenant protection. It is essential to consult a local notary or specialized lawyer before any acquisition.
- Rental Demand
- Persistent scarcity and Monaco’s prestige generate strong rental demand, particularly for properties with sea views or located in central sectors.
- The target profiles are mostly international (executives, athletes, wealthy families).
Potential Advantages
| Advantage | Description |
|---|---|
| Legal Security | Stable legal framework protected by the Monegasque State |
| Property Appreciation | Structural long-term increase due to land scarcity |
| Constant Demand | International appeal; low vacancy rates |
| Advantageous Taxation | No local real estate wealth tax; attractive tax regime |
Associated Risks
| Risk | Description |
|---|---|
| High Acquisition Price | Significant barrier to market entry |
| Variable Liquidity Outside Luxury Segments | Potential difficulty selling atypical properties |
| Restrictive Regulation | Limits imposed on seasonal rentals |
Recommended Financing Strategies
- Prioritize bank financing with institutions specialized in international real estate or directly through private banks established in the Principality.
- Anticipate a substantial personal contribution given the high price per square meter.
- Explore mortgage credit secured by the acquired property.
Taxation & Taxes
Key Points:
- No real estate wealth tax for non-French residents.
- Reduced transfer duties compared to some European countries when purchasing property directly.
To Monitor:
“Before any transaction, validate your personal tax situation with a certified professional to avoid any potential double taxation according to your country of residence.”
Real Estate Management & Maximizing Return on Investment
- Entrust your property to a local specialized agency to ensure:
- Rigorous tenant selection
- Optimization of occupancy rate
- Administrative management compliant with local requirements
- Consider renovation/appreciation: targeted work (modern kitchen, home automation) can significantly increase rental yield as well as property value
- Carefully study each contractual proposal related to the lessor/manager
Guiding Your Steps:
Ensure that each step – research, purchase, financing, then management – is accompanied by local experts who know the specific Monegasque legislation for secondary residences perfectly.
To maximize your profitability while securing your investment:
- Diversify your strategies between long-term rental (stability) and event/seasonal rental during major local events: F1 Grand Prix, international trade shows…
- Regularly conduct a financial & tax audit to adapt your property choices according to personal or regulatory evolution.
Success therefore relies as much on the initial choice as on continuous professional management adapted to the unique specifics of the Monegasque real estate market.
Good to Know:
To invest effectively in secondary residences in Monaco, carefully evaluate the location; sought-after neighborhoods, close to the sea or amenities, often offer better value. Analyze local market trends, monitoring price evolution and property scarcity. Monegasque real estate legislation can be complex, requiring consultation with a legal advisor to understand tax and legal obligations; for example, registration duties and inheritance taxes. The high rental demand in this exclusive region can represent a considerable advantage; however, high maintenance costs and management fees must be anticipated. Explore financing strategies such as Monegasque mortgage credit and maximize return on investment by targeting a high-end clientele or opting for short-term rentals. Finally, effective property management may require engaging specialized managers to ensure the maintenance of quality and profitability of your investment.
Inspiring Examples of Rental Profitability
Concrete Examples of Secondary Properties in Monaco Generating High Rental Yields:
| Location | Property Type | Unique Characteristics | Yield Maximization Strategies |
| La Condamine | Studio | Optimized surface, possibility of conversion to 2-room, near train station and shops | Transformation into 2-room to broaden rental target; rent optimization based on seasonality and local demand |
| Monaco-Ville | Studio/1 Room | Historic charm, sea view, pedestrian accessibility to tourist sites | High-end renovation; targeted advertising on international luxury platforms |
| Fontvieille | Renovated 2-Room Apartment | Terrace with port/garden view, immediate proximity to international offices | Home staging to enhance space; furnished short-term lease via premium platforms |
Example of an Owner Anecdote:
An investor acquired an aging studio in the La Condamine neighborhood at a below-market price. After a complete renovation (space optimization, choice of modern and bright furniture), he transformed the property into a flexible two-room unit thanks to a sliding glass partition. Initially facing low attractiveness of the neighborhood for demanding international clientele, he highlighted the immediate proximity to Port Hercule during the F1 Grand Prix and local festivals in his listings on Airbnb Luxe. Result: the annual occupancy rate exceeds 90% and the gross yield reaches nearly 3.5%, which is high for Monaco.
Current Trends Influencing the Rental Profitability of Secondary Residences:
- Studios remain the properties offering the best yields, particularly in less sought-after neighborhoods like La Condamine or Monaco-Ville.
- Investors now prioritize apartments that can be easily transformed (example: studio convertible into two-room) to anticipate any regulatory evolution regarding new resident accommodation.
- Successful owners consistently emphasize:
- High-end renovation,
- Turnkey furnished offerings,
- Careful communication on specialized platforms or professional networks.
- Despite a slight decrease in recent transaction volume, strong rental demand persists, especially for compact properties suited to expatriate executives or event stays.
Keys to Succeeding in Your Secondary Rental Strategy in Monaco:
- Thoroughly analyze each micro-market (neighborhood by neighborhood) before purchase
- Continuously optimize your offering (flexible layouts)
- Know how to transform any potential challenge – less prime location or atypical configuration – into an opportunity through targeted enhancement
Important:
Perfectly understanding the Monegasque market is essential: strict regulatory requirements, high expectations from wealthy international clientele, and increased competition among owners demand maximum professionalism in rental management.
Good to Know:
In Monaco, certain secondary residences, particularly those located in Monte-Carlo and around Port Hercule, have demonstrated remarkable rental profitability, thanks to their prestigious location and high-end amenities such as private pools and breathtaking sea views. Owners have optimized their income by renovating their properties to meet the expectations of luxury tenants, adjusting rents to market levels, and betting on advertising via high-end platforms. For example, a well-appointed apartment in the Fontvieille neighborhood attracted tenants thanks to its modern style and direct access to sought-after restaurants. Some have transformed underutilized spaces into elegant studios, thereby increasing their rental portfolio. Understanding Monaco’s specific market, where demand for short but luxurious stays is rising, allows owners to leverage the best rental periods to maximize their yields.
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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.
