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Buying A Property And Investing In Monaco

There are several drivers and benefits which attract the jet set to Monaco. The omission of income tax attracts notably high earners. However, this only tells half of the story. Other key benefits include the safety offered, low crime rates, and an increased number of policemen and women on patrol per resident.

For investors, Monaco offers some of the most luxurious real estate. Its size, roughly the same as Central Park, ensures that high values and limited stock and surroundings equate to timeless desirability. Its proximity to the med is another motivation for property investors, with Cannes, St Tropez and Portofino not far away.

The climate is also very agreeable, offering mild winters and long hot summers with temperatures easily breaking 30c.

The principality also offers a raft of international schools, private hospitals and clinics, making it suitable for young families for formula one drivers. Speaking of hospitals, healthcare in Monaco is second to none, with excellent public and private hospitals.

The property market in Monaco

Despite the turbulence and upheaval caused by the pandemic, Monaco remains a highly desirable destination for property investors. The pandemic and spread of Covid was managed well by the principality.

The property market in Monaco remains the most expensive location to purchase residential property. The average home is now costing €47,000 per square metre, down 1.1% from the highs of 2019. Transaction numbers did decline in 2020, falling by 11% vs transaction numbers in the previous year. Notable declines were seen in villa and large apartments prices, falling 53% and 38%.

Properties under the €5m level sold the most in Monaco, only seeing a decline of 6% in sale terms. Homes over €10m saw a drop of 39%.

However, the decline in appetite has far derailed pricing in the principality; prices have appreciated 50% over the last decade. Experts believe that the end of the pandemic will prove business as usual, and the market pick up where it left off. 

Should you buy or rent in Monaco?

Renting or buying in Monaco is expensive no matter which option you select. We take a look at things to bear in mind when choosing between the options. 

Renting property in Monaco

Agencies manage the real estate market in Monaco. Whilst private sales and rentals are possible, few landlords or owners manage their sales or rental properties. Rental contracts in Monaco will typically be signed for a year or more with the ability to renew. 

A tenant will be expected to pay a quarter rent upfront, plus a deposit and lease registration fee of 1%. All in the 1st payment made will typically equate to roughly six months’ worth of rent. Rent in Monaco is paid in advance every three months, with additional service charges added to the total invoice. 

To receive approval to rent a home in Monaco, you will need to supply a few pieces of paperwork. These will typically include a bank statement, proof of earnings or a new employment contract. 

As demand far outstrips supply in the principality, landlords can be picky. Monaco’s rental prices will range from €1800 for a modest studio to up to €7000 for a luxury one bed. Pricing will depend on the quality of fixtures and fitting, amenities, plus the property’s location. 

Buying a home in Monaco 

Whilst renting a property in Monaco may seem pricey, the prospect of owning a home in Monaco will seem eye-watering. Studio properties are regularly sold for €1,5m, and a house with a sea view command a lot more. Four to five-bedroom apartments commonly sell for anything between €13m to €67 million. Therefore owning a property is a pursuit left to the super high net worth individuals.

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Rent or buy summary  

The choice of renting or buying will come down to one factor, money. Even those with the very best vocations will have the ability to purchase in Monaco. Those purchasing will either be located there for tax benefits or to make sound property investments and capitalise on the continual secure appreciation of a property asset. 

Best places to buy in Monaco

Carre d’Or – home to luxurious boutiques, the casino and the principalities most highly renowned hotels, including the Hermitage and Metropole. The area offers prestige and glamour and is perfect for the super high net worth property buyer that loves entertainment and wants to be seen. 

Larvotto – is the most easterly location in Monaco and Northeast of Monte Carlo. The recently rejuvenated Larvotto public beach also welcomes sun worshipers and swimmers during the summer months. The popular manufactured fine gravel beach is considered one of the gems of Monaco, offering private and public areas alike. 

Jardin exotique – this gorgeous botanical garden is nestled in the hills above Monaco. The Jardin, located in the most northwest of the principality, is arguably the most unique with an unrivalled view of the Mediterranean Sea and Monte Carlo. 

Fontvielle Monaco –  located in the most southern location of Monaco. The area was developed by renowned Italian architect Manfredi Nicoletti. The site was man-made to combat the lack of space in the principality. Fontvielle overlooks the harbour and is called home by Lewis Hamilton, Michael Schumacher and Boris Becker. 

Quartier St Roman – offers white sandy beaches and the famous Monte Carlo beach club. Numerous shops can be found on L’avenue Princesse Grace, and restaurants can be found in the direction of Larvatto, which is just a stone thrown away.  

Can a foreigner buy a property in Monaco?

Buying property in Monaco is relatively straightforward. There are zero restrictions on foreigners buying properties in the principality. You will need the services of a public notary to make sure that the terms of the purchase contract are accurate and conform to the law. The property sale can be quickly concluded, between 1 and 2 months.

Property costs of buying in Monaco

Similar to the property prices in Monaco, the property buying costs are high compared to other areas of Europe. The costs for the buyer include Registration Tax, Notary fees and a portion of the agency fees. 

A portion of the estate agency fees will be at the cost of the vendor. 

The buyers’ additional costs will represent roughly 9.5 to 13.5% of the property cost as a rule of thumb. The vendor should expect to pay approximately 6% of the sale price costs.  

Newbuild property in Monaco 

Developments in Portier cove and Carre d’Or areas mean those preferring to buy a new home will have a good amount of choice. There is a range of newbuild developments concluding in the coming years. Five-star developments include One Monte- Carlo and Testimonio 2.

Newbuild construction includes high-end apartments, townhouses and villas. With m2, prices can go as high as €100,000. 

Most expensive areas in Monaco

The most expensive areas to buy property in the principality are the Larvotto and the Carre d’Or. The m2 prices will range from €25,000 (average for Monaco) to those mentioned above €100,000 m2 for a highly well-appointed new property in the most desirable locationsLarger homes, including penthouses, large apartments and villa’s with sea views and terraces, will also command high prices.  

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Least expensive areas in Monaco

Technically for the majority of investors, no area of Monaco could be classed as cheap. Monaco is amongst the most expensive real estate in the world. Those looking to rent a modest property in Monaco should expect to pay at least €3500 per month, and those searching to buy a home should budget €10,000 per m2 at the very least. 

The cheapest areas in Monaco include:

 La Rousse – Saint roman

Considered one of the best value areas in Monaco, enjoying views of the Mediterranean and the Larvotto area of Monaco. Rental properties start at around €2500 in the area, which gets you a modest studio apartment. Finding a property purchase under €1m is unlikely but possible, don’t expect much space with just 20 M2 being realistic.  

Monaco – Ville

One of the ten wards compensating for the fact that Monaco doesn’t have a traditional capital. The ward is located in the southern part of the principality. Monaco – Ville is home to the Saint Nicholas Cathedral and the Palais Princier. Monaco- Ville is commonly referred to as ‘Rocher’ or Rock by locals. 

Properties on Rocher are typically more modestly sized and situated in older buildings. Apartments, despite the more petite sizes, cost around three million euros. Investors can anticipate spending around six million for apartments with three rooms or more. 

La Condamine

Considered an iconic part of the principality, La Condamine is one of the original four areas of Monaco. Looking over the glamourous harbour La Condamine is regarded as one of the most luxurious areas in Monaco. La Condamine is a vibrant, active, and sophisticated part of the principality. The area has roughly 3700 inhabitants meaning demand for homes in La Condamine is high; finding any property under €1,150,000 is an incredible feat. 

Expat life in Monaco

Monaco is synonymous with a luxury expatriate lifestyle. Its warm Mediterranean and favourable income tax laws being too good to resist for HNW individuals and businesses. The local economy thrives on tourism. Many ski resorts, beaches, and golf courses are never far away, meaning access to sporting pursuits.

Those relocating to Monaco who have families will encounter French-speaking state schools and elite international schools. The international schools proving popular with expat families want their kids to enjoy a broader range of topics.

Whilst often considered as a playground for socialites and the super-rich, Monaco also offers other family events which are more family-friendly.

Top tips for those buying Monaco

Find a local agent – property in the principality is rare and expensive. Investors always want to feel like they have made a significant investment. Feeling comfortable with an agent with good local knowledge and contact can make a huge difference.

Be aware of future developments – Monaco evolves all the time, and buildings crop up regularly. If you find a property, make sure that any close developments are close to completion or won’t interfere with your life. There is nothing worse than finding yourself in the centre of a building project which could last for months or even years. Your agent should highlight this if it is the case, which gives you room to renegotiate or avoid purchasing potentially.

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Make a written offer – No property purchase begins without a formal written offer from the buyer. Your agent/advisor cannot put this offer together, although they will almost certainly assist with this.  

Getting written confirmation – Once the offer is sent, ensure the owner or their representing agent confirms reception and outcome of the request. This confirmation makes the sale legally enforceable. 

Financing a home in Monaco

The principality is a prevalent location, and financing is available for both residential purchases and investments. Investors who can provide a significant amount of collateral will generally finance 50-100% of the property amount. This collateral will be held as assets by the Monaco bank, and interest earned can compensate for the interest on the mortgage.  

The mortgage terms are usually set at five years but can be renewed by up to 30 years.

Transferring money to buy a property in Monaco

Once you’ve found your ideal home in Monaco, it’s feasible that you’ll need a lot of euros to complete a purchase on pay a significant portion of your quarterly rent. The timing of these transfers when the rate is advantageous is vital. A currency broker will guide you through data and impactful news to get the best rate for you.

Currency brokers off many more contract types, meaning you will be able to lock in favourable rates, target better exchange rates and perform regular payments with ease. 

A broker can advise whether buying a newbuild home and making multiple transfers or two transactions for a resale property.

Opening a bank account in Monaco to buy a home

Opening a bank account in Monaco is relatively simple. The banks will typically require the following documentation to provide you with a current account.

  • Valid proof of ID 
  • Resident card 
  • Proof of earnings
  • Evidence of earnings or salary
  • Recent utility bill

Those who open accounts with private banks will be expected to deposit around €500,000 shortly after the account opening. 

The property buying process in Monaco

These are the steps buyers should take once they decide to buy a home or investment in Monaco. 

Get a Notary (Notaire) 

If you are buying or selling a home in Monaco, the importance of getting a competent notaire is invaluable. Although buying or investing in the principality is pretty straightforward, the guidance of a legal professional is critical when buying in Monaco.

Buyers offer letter (Offre D’Achat)

Once you’ve found your ideal property, you’ll need to confirm your buying intention by letter. The letter must contain a description or address of the property, plus a target date to complete by.

Purchase contract 

Once everything is agreed between the buying and selling parties, the Notaire will put together the purchase contract or compromise de vente. This contract will supply a competition date, any rights or constraints on the ownership. Other conditions might include a clause of getting finance, permit to develop the property. Due to the profile of the clients and the lack of space available in Monaco, these types of clauses are rare to see.

Completion (Acte De Vente) 

The property sale will be completed at the Notaires office, with the balance of the property being paid a day or so before. Notaires fees and transfer taxes (see above) are produced at this point. Once the ‘acte’ is signed, the Notaire transfers the funds, and the new buyer is registered as the legal owner.

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