Key Laws Overview
Law No. 887
- Scope:
Applies to residential buildings constructed before September 1, 1947. - Main consequences (leases, tenant rights):
- Leases must be at least 6 years.
- Rent is set freely by the landlord.
- Landlords must file a vacancy declaration within 8 days after the property is vacated, followed by a lease or occupancy declaration once the property is reoccupied.
- Eligible tenants: Monegasque citizens, ascendants/descendants of the owner or their spouse, residents in Monaco for at least 5 years with professional activity, or those employed in Monaco for at least 5 years.
- Tenants can terminate the lease annually with notice (typically 3 months), whereas landlords can only terminate after 6 years, usually with 3 months’ notice.
Laws 1291 / 1235
- Regulated rents:
For properties under this regime (often older buildings), rent increases are controlled by the administration. - Compensatory allocation / Priority:
Rentals are reserved for protected categories: Monegasque citizens, descendants or ascendants, persons born and always residing in Monaco (under conditions), or long-term residents (e.g., 40 years). - Lease duration and rules:
6-year leases, automatically renewable under the same conditions. - Pre-emption right:
For “regulated” properties, the State has a pre-emptive right for a limited period (usually 4 weeks). If the State waives it, tenants may exercise a pre-emptive right.
Other Useful Texts
- Ordinance No. 4.621 of December 29, 1970 — implements Law 887.
- Ordinance-Law No. 669 of September 17, 1959 — legislative framework amended by Law 887.
- Texts relating to protected rental for pre-1947 properties, especially via Law 1235 (amended by 1291).
Monaco Real Estate Market Context
The old property stock in Monaco, mostly pre-1947 buildings, represents the regulated sector. This stock is gradually decreasing, reducing the number of properties subject to Laws 1235/1291 or 887.
Consequently, the majority of properties available for sale or rent belong to the free sector, not subject to these laws, offering buyers more flexibility for resale or free rental, attracting international investors and foreign buyers seeking freedom of use and management.
The market remains very tight: high demand, scarce supply, and pressure on older properties, resulting in high prices, especially for “free sector” properties, as the regulated sector shrinks.
Can Foreigners Buy Property in Monaco?
Laws regulating rentals (887 or 1235/1291) primarily concern rental use of older properties, not ownership itself: it is possible to buy property in Monaco as a foreigner, whether “under law” or not.
However, if you purchase a “regulated” property, you must comply with rental restrictions, including tenant selection, controlled rents, or lease conditions, as well as administrative reporting in case of vacancy.
Legal Notes — Non-Resident Buyers
- Foreigners can acquire property in Monaco with no legal restrictions on ownership.
- If the property is “under law,” future rental use is subject to applicable rules.
- Upon resale, pre-emptive rights may apply: first the State, then possibly the tenant.
Purchase Procedure: Steps, Formalities, and Required Documents
Property Search and Selection
Clearly define your buyer profile, considering your lifestyle and investment objectives. Select properties based on location, living area, number of bedrooms, and co-ownership characteristics, such as the quality of management and common facilities. Identifying your priorities allows you to target properties efficiently and avoid unnecessary visits.
Written Purchase Offer
Formalize your purchase proposal by specifying the offered price and any conditions precedent, such as obtaining financing, conducting an appraisal, or obtaining legal approval. A written offer demonstrates your commitment and allows the seller to evaluate your seriousness. Clear and complete drafting minimizes misunderstandings and facilitates negotiation.
Deposit
The deposit, held in escrow, typically ranges from 5 to 10% of the price. It secures the transaction, demonstrates commitment, and serves as a guarantee of seriousness to the seller. The deposit remains blocked until the signing of the final deed, ensuring both parties honor their commitments.
Preliminary Contract or Preparatory Deed
Depending on the property type, a preliminary contract or preparatory deed may be signed to formalize the agreement before the final deed. Some properties, especially those under specific regulations, require this deed to validate the transaction. The contract outlines the sale conditions, deadlines, and obligations of each party.
Notary and Advisory Checks
Before signing, the notary verifies the title of ownership, mortgage status, the existence of easements, and the co-ownership regulations. Technical inspections and administrative compliance are also checked to secure the investment. These verifications help identify potential issues or restrictions and ensure the legality of the transaction.
Signing the Sale Deed
The authentic deed of sale is drafted and signed with a Monaco notary. The balance of the price is paid, and the keys are handed over to the buyer. The deed is then registered and transcribed in the land registry, ensuring legal security and full ownership of the property.
Common Required Documents
Prepare the following documents for the purchase:
- Identification (passport for non-residents)
- Proof of residence
- Bank account details (IBAN) for funds transfer
- Proof of funds demonstrating payment capacity
- Power of attorney if represented
- Civil status certificate or proof of legal capacity for corporate buyers
Costs, Taxes, and Fees Related to the Purchase
Registration Fees / Transfer Duties
Transfer duties depend on the buyer’s status and purchase structure. For an individual or Monaco-registered civil company, the rate is approximately 4.75% of the price. These fees cover official registration and land registry entry.
Notary Fees
Notary fees represent approximately 1.5% of the price, bringing the indicative total tax to ~6.25% for a standard acquisition. The notary ensures legal compliance, transaction security, and the drafting of all necessary documents.
Agency Commissions
Agency commissions vary and are specified in the sales mandate or purchase offer. They cover the search, selection, negotiation, and support throughout the transaction.
Special Cases
Purchasing shares in companies owning real estate or quick transactions under the property dealer regime follow specific fiscal rules and require tailored structuring.
Other Costs
Budget for bank processing fees, potential compliance costs, as well as insurance and co-ownership charges, ensuring proper property management and protection.
Property Status, Co-ownership, and Owner Rights
Property Status
The title of ownership is registered in the Monaco land registry, officially recognizing your rights. Any mortgage or easement is listed in the cadastral extract, allowing you to anticipate potential constraints on property use.
Co-ownership
Co-ownership is governed by Law No. 1.329 of January 8, 2007 and Law No. 1.531 of July 29, 2022. The co-ownership regulations are mandatory when dividing into lots and define the rights and obligations of each co-owner.
Charges and Budget
Each co-owner contributes to shared expenses, provisions for maintenance, and the reserve fund. Works are decided in a general assembly according to the majority rules defined by the regulations. Understanding these charges helps avoid financial surprises.
Assemblies and Governance
The property manager, professional or voluntary, organizes general meetings and ensures proper implementation of decisions. Majority rules determine approval of routine decisions, works, and maintenance of common areas.
Owner Rights
Owners have exclusive use of their lot, participate in votes at general meetings, and enjoy their property freely, subject to co-ownership regulations and existing easements.
Legal Specificities for Rental Properties
Distinction Between “Free” and “Protected” Sectors
Some older properties fall under a regulated rental regime, while most properties belong to the free sector, allowing rentals without strict rent controls.
Rules for Older Properties
Regulated leases impose minimum durations, priority beneficiaries, and reporting obligations regarding occupancy and vacancy.
Rights of Tenants and Landlords
The lease defines notice conditions, the contractual term (often 6 years for regulated leases), and rent review procedures, ensuring a balance between tenant rights and landlord interests.
Right of First Refusal and Resale
The State may exercise a preemption right on protected properties. If not exercised, the tenant benefits from a preferential acquisition right, securing continuity of occupation.
Administrative Obligations
The owner must keep vacancy declarations up to date and inform authorities according to the type of lease and property, ensuring compliance with Monaco regulations and transparency in property management.
Tax and Inheritance Considerations
Acquiring property in Monaco requires considering tax and inheritance implications. The Principality does not levy income tax, wealth tax, or inheritance tax for Monaco residents. However, rules vary depending on the nationality and tax residency of the buyer.
Transfers via foreign companies or holdings must be structured to ensure legal security and clarity of heirs’ rights. Donations or inheritances often require drafting wills compliant with Monegasque law, allowing proper succession while respecting local and foreign legal obligations. Guidance from a tax and legal advisor helps plan and secure each transaction.
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