Monaco Property Tax: What You Need to Know in 2025

Exception for French Nationals

French citizens who became Monaco residents after October 13, 1957, remain subject to French taxation under a bilateral tax treaty. This includes potential French capital gains tax on Monaco property sales.

Rental Income Taxation

Individual residents of Monaco pay no tax on rental income from Monaco properties. This makes buy-to-let investments particularly attractive for those with Monaco residency status.

However, rental income becomes taxable if the property is owned through a corporate structure rather than held personally.

Tenant-Paid Rental Tax

While landlords don't pay tax on rental income, tenants face a 1% leasehold tax on annual rent plus estimated service charges. This tax is the tenant's responsibility, not the property owner's.

Using a Monaco SCI for Property Investment

Many investors choose to hold Monaco real estate through a Société Civile Immobilière (SCI).

What is a Monaco SCI?

A Monaco SCI is a non-trading company designed specifically for real estate ownership. It requires at least two partners (individuals or legal entities) and has no minimum capital requirement.

Tax Advantages of Monaco SCIs

Monaco SCIs benefit from the principality's favorable tax environment. Associates pay lower taxes than their French SCI counterparts and face no inheritance tax between parents and children under Monaco law.

Property transfers can occur by trading SCI shares rather than selling the underlying real estate. This avoids additional notary intervention and simplifies succession planning significantly.

Confidentiality Benefits

Monaco SCIs offer greater privacy than French structures. The principality does not maintain a fully public company register.

Operational Restrictions

Monaco SCIs cannot rent properties on a furnished basis or engage in commercial property trading.

Comparing Monaco vs. France Property Taxes

The contrast between Monaco and neighboring France highlights why so many choose the principality for property investment.

France's Annual Property Tax

French property owners pay taxe foncière every year. In 2024, the average bill was EUR 1K , with typical vacation homes ranging from EUR 1K -EUR 3K annually.

These annual costs compound over decades of ownership. A property with EUR 2K in yearly taxes costs EUR 30K over just 20 years.

Additional French Property Taxes

France also levies supplementary taxes that don't exist in Monaco:

• Second home surcharges: Properties in areas with housing shortages face additional taxe d'habitation ranging from 5-60%
• Wealth tax (IFI): Real estate holdings above EUR 1.3M are subject to progressive wealth tax
• Capital gains tax: Property sales generate taxable capital gains unless specific exemptions apply

Monaco eliminates all these recurring costs.

Practical Considerations for Property Investors

Understanding property tax in Monaco requires looking beyond just the absence of annual taxes.

Holding Structure Matters

The choice between individual ownership, a Monaco SCI, or foreign company ownership significantly impacts both registration duties and ongoing tax treatment. Individual ownership or Monaco SCIs enjoy the lowest 4.5% registration rate.

Foreign company ownership faces 7.5% registration duties and makes rental income taxable.

Residency Status Impacts Benefits

Monaco's tax benefits on rental income and capital gains apply primarily to Monaco residents. Non-residents may face taxation in their home country on Monaco rental income and property gains.

For maximum tax efficiency, many investors establish Monaco residency alongside their property purchase.

French Nationals Face Different Rules

The 1963 France-Monaco bilateral tax convention means French nationals who became Monaco residents after 1957 remain subject to French income tax. This can impact the treatment of rental income and capital gains, even on Monaco property.

Why Monaco's Property Tax System Attracts Investors

The absence of annual property tax represents just one element of Monaco's attractive fiscal framework. Combined with no income tax for residents, no wealth tax, and no capital gains tax, the principality offers unparalleled tax efficiency for high-net-worth individuals.

This tax structure has contributed to Monaco's stable, liquid real estate market. Properties maintain strong values because ownership costs remain low and predictable.

For those comparing Monaco real estate to alternatives in France or elsewhere in Europe, the lifetime savings from Monaco's tax system can easily exceed hundreds of thousands of euros. Property that would generate EUR 2K in annual French property taxes costs nothing to hold in Monaco.

Final Thoughts on Monaco Property Tax

Monaco's real estate taxation is straightforward: there is no annual property tax. Transaction costs at purchase range from 6-8% for most buyers, but once acquired, property can be held indefinitely without recurring tax obligations.

Rental income remains untaxed for individual owners, and capital gains face no taxation when properties are sold. These policies create one of Europe's most favorable environments for property investment and long-term wealth preservation through real estate.

For investors weighing Monaco property against alternatives, the tax calculation is clear. What you save in eliminated annual property taxes, income taxes on rent, and capital gains taxes typically far exceeds the initial transaction costs.