Tax Benefits for Real Estate Investors in Monaco

Published on October 4, 2025 and written by Cyril Jarnias

Monaco: A Tax Haven for Real Estate Investors

Monaco, this luxurious microstate nestled on the French Riviera, isn’t just a paradise for lovers of glamour and sunshine, but also offers attractive tax opportunities for real estate investors.

In a market where luxury real estate attracts buyers from around the world, the Principality of Monaco stands out for its advantageous tax policy, notably:

• No income tax
• Legal security
• Economic stability

This particularly favorable tax environment stimulates interest from investors seeking to diversify their portfolio while benefiting from a safe and prestigious setting.

A Strategic and Lucrative Investment

Exploring the various tax levers available in Monaco reveals a world where real estate investment can be not only lucrative, but also strategically optimal for effective wealth management.

The Secrets of Local Taxation in Monaco

Monaco’s tax regime is distinguished by the total absence of income tax for residents, except for French nationals subject to a bilateral agreement with France.

This rule, in effect since 1869, means that any individual residing in the Principality – with the French exception – pays no tax on personal income, including salaries, dividends, and interest.

Resident’s Nationality	Income Tax in Monaco
Non-French Resident	None
French Resident	Taxation according to French legislation

“A British investor based in Monaco emphasizes: ‘The local taxation allowed me to optimize my real estate investments without fearing confiscatory taxation on my capital gains or rental income.’”

The Attractiveness of the Monegasque Tax System

The attractiveness of the Monegasque tax system is particularly evident in the real estate sector:

• No tax on real estate capital gains upon resale for individuals.
• No annual property tax, unlike common practices in many European countries.
• Investors thus benefit from an extremely advantageous tax framework for buying, renting, or selling real estate properties.

Local Levies

Local levies are mainly limited to:

• VAT (aligned with that applied in France): standard rate at 20%, possible reduced rates depending on the nature of goods and services.
• Stamp duty:
  – 1% upon signing a lease agreement,
  – 4.55% upon purchase or resale between individuals,
  – up to 6.5% if the property is held via a company.

Main Tax Advantages

• No income tax
• No property tax nor residence tax
• No taxation on personal real estate capital gains
• No inheritance rights between ascendants and direct descendants (rate: 0%)
• Moderate rights between siblings or distant relatives

Many international entrepreneurs testify to having chosen Monaco precisely for this exceptional tax context. A Swiss real estate developer states: “The total absence of recurrent taxation allows me optimal and secure wealth management.”

In summary:
Monaco offers an environment almost exempt from the main direct national and local taxes that usually apply elsewhere. This context naturally attracts both private and institutional investors wishing to fully benefit from the fruits of their investments while enjoying Monegasque prestige.

Favorable International Agreements to Avoid Double Taxation

International agreements to avoid double taxation play a crucial role in Monaco’s attractiveness for real estate investors. By preventing double taxation on real estate income, these agreements allow investors not to be taxed twice on the same income: once in Monaco, and again in their country of residence or origin. This translates into substantial savings and notable tax optimization.

Main Agreements in Force Between Monaco and Other Countries

Country	Nature of the Agreement	Main Tax Implications
France	Specific Agreement	Avoids double taxation; frames taxation of French nationals in Monaco
Luxembourg	Comprehensive DTA	Covers income and wealth tax; secures cross-border investments
United Arab Emirates	DTA	Promotes bilateral investments, eliminates double taxation on real estate income
Qatar	Agreement similar to UAE	Same as above
Malta	Agreement covering income tax	Strengthens tax security
Mauritius, Montenegro, Seychelles, Guernsey…	Various Agreements	Clear allocation of taxing rights

Monaco has signed 36 bilateral agreements with various European countries (Germany, Italy, Austria…), as well as with Australia, India, and the United States.

Positive Impact for Real Estate Investors

• Elimination of double taxation risk: Income from real estate properties located in Monaco or held by Monegasque residents is taxed only once according to precise rules. This allows foreign or expatriate investors to achieve significant savings.
• Clarity and predictability: The conventions clearly establish which country is competent to tax each category of income.
• Amicable procedure in case of tax dispute: All these agreements include a procedure allowing a taxpayer solicited in two jurisdictions simultaneously to request an amicable settlement from the competent authorities.

“The amicable procedure… allows taxpayers soliciting two jurisdictions simultaneously… an amicable settlement with the competent authorities.”

Role Reinforced by the OECD Multilateral Convention

The multilateral convention established under the aegis of the OECD imposes:

• Automatic or on-demand exchange of tax information,
• High standards in terms of transparency,
• Increased international cooperation,

This mechanism strongly reassures investors regarding compliance with international law while significantly limiting the risk related to divergent interpretations between tax administrations.

Concrete Advantages for a Real Estate Investor:

• Direct savings: No cumulative payment of property/income tax in multiple jurisdictions
• Increased legal security
• Protection against abusive reclassification
• Facilitated international wealth optimization

The entire Monegasque treaty network thus offers investors effective protection against any form of double taxation as well as a stable and transparent regulatory environment durably favoring their economic interests.

Property and Residence Tax: A Tax Haven for Investors

In Monaco, the absence of property tax and residence tax constitutes a decisive tax advantage for real estate investors. Unlike the majority of European countries, no annual tax is levied on the ownership or occupancy of a real estate property in the Principality. This extremely light tax regime makes Monaco a privileged destination, often referred to as a tax haven for high-end real estate investments.

Real estate owners in Monaco pay neither property tax nor residence tax.

Type of Tax	Monaco	France	Italy	Spain
Property Tax	None	Yes (variable)	Yes	Yes
Residence Tax	None	Phased out (still in effect in some cases)	Yes	Yes
Wealth Tax	None	IFI applicable	ISF abolished	Regional ISF

This advantageous tax situation strongly encourages investments in high-value-added real estate. Wealthy buyers often favor Monaco where they can diversify their assets without being subject to the recurrent levies that burden rental yield or weigh on property valuation.

• Increased attraction for international investors, particularly those from countries with high tax pressure.
• Stimulation of the high-end residential market: villas, penthouses, and family apartments regularly set world records per square meter.
• Protection of invested capital thanks to the total absence of annual taxation on held real estate assets.

The contrast with other European markets is striking:
In France, for example, an owner must pay each year not only the property tax but also potentially the IFI if their net wealth exceeds €1.3 million. In Spain or Italy as well, these taxes represent several thousand or even tens of thousands of euros per year depending on the type and location of the property.

Implications for the Local Market and Residents

• Constant rise in price per square meter (on average over €50,000/m²), fueled by sustained international demand.
• Increased selectivity: only buyers with significant financial power access the Monegasque market.
• Possible effect on the social fabric: relative scarcity of housing accessible to local middle classes in the face of this international attractiveness.

Recent Statistics / Case Studies

Studies show that nearly 80% of real estate transactions involve a highly capitalized foreign clientele. For example:

• A Swiss investor who purchased an apartment for €10 million saves each year between €20,000 and €40,000 that they would have paid in local taxes in their initial country of residence.

The Principality has thus seen its population grow rapidly in recent years among HNWI profiles (High Net Worth Individuals), many of whom explicitly cite “the total absence of local taxation” as the main reason for choosing Monaco.

The exceptionally favorable tax environment thus durably positions Monaco as the undisputed European leader for any heritage real estate investment

Monaco Versus the World: The Match of Tax Advantages

Jurisdiction	Income Tax	Property Tax / Local Taxes	Inheritance Rights	Main Tax Rates (2025)	Tax Residence Regime	Notable Tax Specificities
Monaco	None (except French)	None	Practically non-existent	IR: 0%; CIT: 25-33.33%*; VAT: 20%, 10%, etc.	Physical residence >6 months/year, actual dwelling	Total absence of IR, no property tax nor wealth tax
Switzerland	Yes (progressive)	Yes	Depending on canton	IR: up to ~40% depending on canton; CIT: ~12-18%	Residence >183 days/year or center of vital interests	Lump-sum taxation possible for wealthy expatriates
Singapore	Yes (progressive)	Yes (low)	None for direct heirs	IR max. residents: 24%; non-residents: flat; CIT:17%	Strict territoriality of taxable income
Cayman Islands	No direct tax				No strict requirement if actual presence	No taxation on income or companies

*In Monaco, corporate income tax applies only to companies realizing more than 25% of turnover outside the principality and can reach up to 33.33%. Local companies are generally exempt.

Main Characteristics That Make Monaco a Preferred Destination for Real Estate Investors

• Total absence of income tax, except for French citizens who remain subject to French taxation under a bilateral agreement.
• No property taxes nor residence tax, which strongly reduces the net annual cost related to real estate ownership.
• Inheritance rights practically non-existent, notably in direct line.
• Wealth tax and taxes on fortune absent.
• VAT follows the French regime through customs union with identical rates but specific thresholds adapted to certain types of activity and recent developments concerning short-term tourist accommodation.

“Monaco does not levy personal income tax… No wealth tax nor property or housing taxes… These tax absences are an integral part of Monaco’s strategy to stand out from neighbouring countries.”

Adapted Source

Detailed Comparison with Other Major Financial Centers

Switzerland

• Progressive tax that can reach about 40% depending on cantons and communes.
• Existence of the lump-sum tax (“forfait fiscal”), allowing wealthy foreign residents not working in Switzerland to negotiate a global amount based not on their actual income but their lifestyle – a mechanism criticized by the OECD.
• Variable property taxes depending on cantons.

Singapore

• Territorial taxation: only income generated locally or repatriated is taxable there.
• Relatively low marginal rates compared to Western Europe: maximum currently set at 24% for resident individuals.
• No inheritance taxes since their abolition.

Cayman Islands

No direct tax:

• No income tax
• No local taxes
• No inheritance rights

But also an almost total absence of international conventions against double taxation – hence potential restrictions in certain international structures.

Concrete Numerical Examples

Suppose a real estate investor holds a residential property worth €10 million:

Monaco:

• No annual tax nor local tax;
• Rental income non-taxable if non-French individual;
• Annual expenses reduced mainly to current charges;

Switzerland:

• Variable real estate tax (~0.3–1%) → potentially high annual cost;
• Taxation of fictitious rental income (“rental value”).

Singapore:

• Progressive Property Tax (~€10–20k annually estimated), depends on type/value of property;
• Locally received real estate income taxable.

Cayman Islands:

No regular levies but high initial fees during real estate purchases/transfers.

Controversies and International Criticisms

Ultra-advantageous tax regimes like Monaco’s are regularly subject to:

• Criticisms related to tax competition deemed unfair by some OECD/EU member states,
• Increased pressures around transparency/automatic subscription CRS/FATCA issues,
• Periodic investigations regarding potential money laundering via real estate investments,
• Recent regulatory adjustments aiming for better international cooperation without however questioning its attractive fundamentals.