Despite being the second smallest sovereign state globally, after the Vatican City, Monaco still looms large where the property market is concerned. Monaco Real Estate is one of the most resilient on the property market scale, even during this pandemic. As with other countries in crisis times, sales volume decreased; however, the prices remained relatively stable in Monaco. Monaco remains the most expensive luxury and rental market in the world! And this is predicted to continue in 2021 as well.
A few reasons for this are given below:
Location and Climate: The sunshine in Monaco is not the only reason for it being so popular. True, the Mediterranean climate with hot summers and mild winters is an added attraction – for tourists and residents alike. It is within easy access of France to the north, east and west and is surrounded by the beautiful Mediterranean Sea to the south.
Security: Monaco is known as having the “safest square mile” in Europe. Not surprisingly so, since it has an armed national police force consisting of over 500 persons, protecting this tiny country. It has one of the largest police presences in the world on a per-area and per-capita basis.
Transport: Road, rail and sea transport is available.
- The rail system is underground within Monaco and links to various cities in Europe.
- Road transport is readily available with many bus routes, mainly on the A8 which runs west to Nice and Marseille and east towards the Italian border.
- A ferry service, electrically operated, runs between both sides of Monaco port. There are two ports in Monaco with seasonal ferry lines.
- The closest airport is the Cote d’Azur Airport in Nice, France, although there is a heliport in the district. Helicopter charter services are available to French ski resorts.
- Within the tiny state, inclined lifts including elevators and travelators, provide public transport.
Environmental friendly: New technology, research and development to promote a “greener” environment is provided by the Prince Albert II of Monaco Foundation.
- Wastewater treatment and effective waste management have been put in place.
- The Government encourages eco-friendly vehicles and grants subsidies to purchase clean energy vehicles based on CO2 emissions.
- Solutions to decrease the buildings’ carbon footprint is being worked on.
- To help with stabilising global warming, Monaco has reduced its greenhouse gas emissions.
- The beautifully maintained parks and gardens add to the “Green is Glam” policy. They are managed eco-responsibly, by preserving water resources, developing organic pest control methods and cutting down on chemical treatments.
- Testing of the quality of the air and waters used for swimming is being maintained.
Space: With its 0.81 sq mile area, space has always been limited in Monaco. However, with the Portier Cove or Mareterra being constructed after claiming 6 hectares (15 acres) from the sea, it will provide more space and buildings – apartments or villas – to either own or rent. Also known as Le Portier, it will extend between the Grimaldi Forum and Port Hercules. It is located near the Avenue Princesse Grace – the most expensive residential street in the world! It is planned for completion in 2025. Prospective buyers have already shown much interest to purchase units off-plan. Here also, special measures are being taken to protect the environment, including preserving all species of sea life. Rare species are being relocated to new seabeds.
Tax haven: The tax leeway in Monaco has created an added incentive for real estate there.
- There is no capital gains tax nor is there a net wealth tax.
- There are no property taxes in Monaco, though rental properties are taxed at 1% of the annual rent income with other applicable charges. If real estate is sold at a profit, the tax is 33.3%. However, losses on real estate can be offset against gains on other sales for 5 years.
- There is no personal income tax and no inheritance tax as a beneficiary. One exception – French nationals who are residents of Monaco have to pay personal income tax directly to the French government as per their tax laws.
- However, to become a Monegasque citizen involves a relatively lengthy procedure of a temporary residence period for one year, renewable annually for the first three years. Then an ordinary residence permit for three years, renewable at the end of the three years for a further three years. During these nine years, at least three months per year should be spent in Monaco. Then, a privileged residence card can be applied for, valid for ten years. This permits the holder to apply for citizenship when the holder is required to spend at least six months + 1 day in Monaco annually. Despite the tax perks, it should be noted that VAT is higher and the corporation tax is 33%. Social insurance contributions by both employees and employers are high.
Conclusion: Monacohas established itself as one of the most progressive tourist destinations in Europe. With its sustainability and all the other advantages of high security, proximity, eco-friendly lifestyle and tax benefits, it is predicted that the property market in Monaco will continue to prosper.