BUY MONACO! WHY MONACO?
The Principality of Monaco is one of the most stable and rising real estate markets of the world. It is so due to the unique taxation system that attracts millions of dollars to save and multiply. Secret of Monaco's prosperity is 0% residents' income tax on all activities in and outside the country since 1869. Though French nationals are the exception from this beautiful rule.
All residents of Monaco regardless of citizenship or nationality who spend more than 183 days a year in this tiny state of 2,02 sq.km also enjoy absence of wealth tax, capital gains tax, real estate annual tax, gift or inheritance taxes for direct liners (parents, spouses, children). The companies operating within the Prinicipality (at least for three quarters of turnover) enjoy 0% profit tax. Thus, Monaco had become not only the place of spending but the important mean of money saving. One only has to get official Monegasque residency and that includes real estate ownership or renting.
MONACO REALTY STATISTICS
Low taxation is the main reason for the permanent rise in Monaco population and for the escalating of real estate prices in Monaco. Monaco witnessed record sales in 2014, booming market in 2015. Official statistics released by IMSEE MONACO STATISTICS in 2015 is showing 31% increase in total value of sales vs 2014. In comparison with 2013 data, real estate market sales value in 2015 more than doubled amounting to 453 mln euro. The average purchasing price in 2015 was 11,9 mln euro for the apartment. As per official sources, average price per m2 in Monaco was 36 000 eur in 2015. If compared with prices of 2006, average price per m2 in Monaco has risen by 144%.
Statistics is also demonstrating that 69.6% of sales value in Monaco count for apartments with 5 and more rooms meaning that it is the most active resale segment.
Cheapest studio-flats in Monaco of 20-25 m2 were worth 750 000-950 000 euro in early 2016 same as running small- or medium-sized hotel in Montenegro, Bulgaria or Greece (Corfu).
Prices for one-bedrooms apartments (salon+1 bedroom) start from 1-1.2 mln euro, cost of the worst two-bedroom apartment in need of renovation (salon+ 2 bedroom) was 1.39 mln eur, enough to afford a beautiful castle in France. The lowest budget for small three-bedroom unit (salon+3 bedroom) was 2.78 mln eur in 2016. The bottom figures are, however, much lower than average ones which are at least twice as high. These prices make Monaco a rational choice of a qualified buyer.
Offer for detached villas is rather scarce, mainly over 25-30 mln eur.
Rental yields in Monaco are quite low, between 1,3-2,5% per year compensated by the overall growth in prices. Investment and renovation for subsequent resale was more profitable recently bringing 10-20% per annum. Resale operations could bring 10-15% even with no renovations done.
In 2014-2015 most of the property buyers in Monaco were from Italy and from Russia which is explained by strengthening of tax politics in these jurisdictions.
BUYING COSTS IN MONACO
Buying costs in Monaco are rather high including 4.5% property transfer tax, notary fee of 1,5-2,5% and agency's commission: 3% (+19.60% VAT) from the Buyer side. Overall buyer's expenses amount to approx.10% in case of property purchase at secondary market. In case of new apartment purchase the costs be even higher as property transfer tax will be replaced by Value-Added Tax of 19.6%.
All the deals are concluded in Monaco through the office of public notary. Official offers are usually placed in written form being supported by a cheque of 10% deposit. Oral bids are not considered. Accepted offer has a legally binding force for both parties. Once the deal fails due to non-performance of the Buyer, he is losing the deposit.
Payments by installments are not customary in Monaco unless you purchase apartment in a new development and pay as per stage of construction. The deals normally require payments to be executed within 1-2 months maximum.
Opening an account and bank financing of real estate purchases are available to non-residents of Monaco through all the Monegasque banks. Banks are generally financing 50-100% for 5-15 years, under EURIBOR + 1-3% depending on a deal against the collateral in the form of deposit/asset placed in the bank (for approx. 50% of property value). Among Top 10 Monaco banks are: Barclays Wealth Monaco, Banque Edmond de Rothschild Monaco, Credit Suisse Monaco, Societe Generale Monaco, Bank Julius Baer Monaco, HSBC Private Bank Monaco, BNP Paribas Wealth Management Monaco, Coutts & Co. Monaco, Credit Du Nord Monaco, Compagnie Monegasque de Banque. Minimum amount required to be kept on bank account is 50 000-100 000 euro depending on a bank.
VIEWING & BUYING TIPS FOR MONACO REAL ESTATE BUYERS
In connection with recent terrorist attacks certain measures are taken to ensure security of property owners and tenants. The Sellers of properties in Monaco are kindly asking potential buyers to identify themselves providing their official ID documents, passports and LOI (Letter of Intent) indicating the budget of the client. The Sellers may refuse to accept this or that buyer with no explanation. We also ask the client for a short introductory meeting before the viewings.
Monaco likes precision. Later arrivals to property viewings with more than 15 minutes delay are not understandable for the Sellers and may ruin your reputation of a Buyer from the start.
Many apartments for sale in Monaco are rented out and viewing demands 48 hours prior warning or sometimes even earlier prior notification. It is making the viewing process a matter of planning ideally a week ahead of customer arrival or chosen date of visit.
Sometimes the tenants are strongly opposing to making photos inside the apartments, and that may be the reason for provision of no internal photo of apartment by the agent.
There is no sense to bargain offering 50% of the purchasing price. The Sellers of realty in Monaco know the value of their properties and bargains to push the price down for more than 5-10% are hardly possible.
Viewing of the same property in Monaco with two different agencies in a hope to get better price will lead to payment of double commission.
Monaco is a small domain of 2 sq.km. and there is no need to involve 10 agencies to cover the whole market. Once one agency learns you are entering every door on the street, all the others will start treat you as an unserious client.
Viewings in Monaco are rarely made on Saturdays, though possible upon prior agreement with owners and tenants, and are never done on Sundays (unlike visit in Germany). The Monegasques also appreciate public and religious holidays when the demonstration of properties may be not possible. However, we are rendering consulting services 7 days a week and are ready to answer your questions in the most expedient manner.
If you decide to combine attending Formula One races with the property visits – this is not the best idea. Half of Monaco inhabitants (including the Sellers and their representatives) prefer to leave Monaco for this hot period of time to avoid blocked streets and multiple noisy tourists.
Parking in Monaco is a big problem and may take more time than the visits, for that reason we recommend to hire a taxi for the day of viewings.
Many apartments in Monaco are owned by non-resident and offshore companies and it may be suggested to you to purchase 100% of company shares to minimize taxes. However, the form of ownership may effect your residency status and all pros and cons should be considered.
It is an obligation of notary public to check the title and confirm the identity of the Seller but we may also suggest to invite a licensed Monegasque advocate to double check the documents since big money is involved. We could also recommend an immigration advocate to deal with your residence permit in Monaco.
The lowest prices for Monaco apartments involve “viager” contracts. This is a legal construction of property sale with a lifetime rental right of the elderly seller. Be careful, French and Monaco citizens are famous for their longevity.
Absence of annual property taxes is reimbursed by maintenance fee in Monaco condominiums charged by management companies depending on complex rank and amenities.
We are focusing on providing high-end services to direct property purchasers, especially european and overseas buyers. Our extended portfolio includes apartments in more than 170 condominiums of Monaco which enables to plan intensive viewings schedule and demonstrate up to 15-20 properties per day.
Our golden collection of self-standing villas for sale in Monaco is targeting the most demanding buyer.
Customer oriented selections of hot priced offers for further resale, renting or renovation are individually configured for a particular investor.
We aim to cover the whole real estate market of Monaco and we scan sales offers in each and every condominium thus making the market more transparent, open and understandable to the buyers.
You can be sure that your request will be addressed within 24 hours by the most competent consultants!