In France, the inheritance tax is very high…
It is generally thought that French citizens are unable to benefit from one of the Principality’s key assets – its particularly lenient tax regime for individuals. But the Principality has so much more to offer, from its security to the quality of its climate, its exceptional environment, its lively social life, its health system, and more, that many French citizens still choose to settle here!
It is also worth being aware that buying a property in Monaco, for a French person not residing in the Principality, can lead to substantial savings on inheritance tax.
The legacies concerned are governed by the “Convention between France and the Principality of Monaco for the avoidance of double taxation and the codification of rules of assistance in matters of succession”, signed in Paris on 1 April 1950. Article 2 of the Convention states: “Property ownership and rights forming part of an estate inherited by a national of one of the two contracting States shall only be subject to inheritance tax in the State in which said property is located.”
The Franco-Monegasque bilateral agreement of 18 May 1963 made no challenge to this principle.
The inheritance tax rate in Monaco depends on the degree of kinship between the deceased and the heir. For direct links between parents and children or between spouses, the rate is 0%.
Depending on the legacy of the deceased, the savings made when compared to an inheritance in France could reach up to 45% of the value of the property acquired.
For example, in the context of inherited assets valued at €5 million with two direct heirs, the purchase of a property in Monaco worth €1 million would save €450,000 in inheritance taxes.
Becoming a property owner in Monaco also means you can benefit from a favourable tax regime, since there is no property tax or residence tax in the Principality of Monaco.
Moreover, while the rental yield in Monaco is far from extraordinary (between 1.5 and 2%), compared to France the legal environment is significantly more advantageous to landlords and the rental market is dynamic and solvent.
The stability of the Principality’s political and economic environment, as well as the attraction of the Principality to wealthy citizens across the world, also inspires confidence about the future of real estate prices in Monaco.
All excellent reasons for a French citizen to seriously consider a real estate investment in Monaco!
And you, would you enjoy living in Monaco and benefit from all the great advantages of Monaco? Do not hesitate to discuss with us about your real estate acquisition projects in Monaco!