Monaco charges no income tax, no capital gains tax, no wealth tax, and no annual property tax on residential real estate. That’s not a simplification. It’s the actual position for residents of the principality, established by sovereign ordinance and unchanged since Prince Charles III abolished personal income tax in 1869. But “zero tax” doesn’t mean zero cost, and the details matter more than the headline – particularly for French nationals, for buyers using corporate structures, and for anyone comparing Monaco to other European low-tax jurisdictions like Andorra or Switzerland.
Since 1869 for residents
No tax on property disposal
Direct line and spouses
Transfer and notary fees
Last updated: February 2026
By: Alexander Thornbury MRICS
- What personal taxes do Monaco residents pay?
- Is there any annual property tax in Monaco?
- What are the actual costs of buying property?
- How does Monaco’s inheritance tax work?
- Why are French nationals treated differently?
- What about company tax and corporate ownership?
- What is an SCI and should you use one?
- How does Monaco compare to Andorra and Switzerland?
- Key takeaways
- FAQ
What personal taxes do Monaco residents pay?
The short answer: almost none. Monaco has no personal income tax, no capital gains tax, no wealth tax, and no net worth tax for individual residents. This has been the position since Sovereign Ordinance No. 3.152 of 19 March 1964, which formalised the absence of direct personal taxation that had existed in practice since 1869.
Here’s the complete picture of what Monaco residents do and don’t pay.
| Tax type | Monaco rate | Notes |
|---|---|---|
| Income tax | 0% | No personal income tax for residents. Exception: French nationals (see below) |
| Capital gains tax | 0% | No tax on property or investment gains |
| Wealth tax | 0% | No net worth tax of any kind |
| Annual property tax | 0% | No equivalent to UK council tax, French taxe fonciere, or Spanish IBI |
| Inheritance tax (direct line) | 0% | Spouses and children/parents. Source: monservicepublic.gouv.mc |
| VAT | 20% | Harmonised with France. Applies to goods, services, and new build property purchases |
| Social security (CCSS) | Variable | Employed residents contribute via payroll. Self-employed and non-working residents contribute based on status. Coverage includes healthcare via the CCSS (Caisses Sociales de Monaco) |
Sources: Monaco Government, monservicepublic.gouv.mc, Knight Frank Monaco buying guide.
The one ongoing cost that catches some buyers off guard is social security. Monaco’s CCSS (Caisses Sociales de Monaco) system provides healthcare and social coverage, and contributions are mandatory for residents. Employed individuals pay through payroll deductions (split between employer and employee). Non-working residents or self-employed individuals make contributions based on their category and declared situation. The contributions aren’t trivial, but they’re a fraction of the tax burden in most other European jurisdictions.
Is there any annual property tax in Monaco?
No. This is worth stating plainly because it’s so different from every neighbouring jurisdiction. Monaco does not levy any annual property tax, council tax, municipal tax, or equivalent charge on residential real estate. You buy, you own, and the government doesn’t send you an annual bill for the privilege.
Compare that to the alternatives:
- France: Taxe fonciere (land tax paid by owners) plus taxe d’habitation (being phased out for primary residences, still applies to second homes). On the Cote d’Azur, these can run to thousands of euros annually for a luxury property
- Spain: IBI (Impuesto sobre Bienes Inmuebles) ranges from 0.4% to 1.1% of cadastral value, plus wealth tax in some regions. For a Marbella property, the annual tax burden is material
- UK: Council tax (up to GBP 5,000+ per year for prime London) plus the Annual Tax on Enveloped Dwellings (ATED) for corporate-held properties valued above GBP 500,000, which can run to GBP 28,650 or more annually
This zero ongoing tax position is one of Monaco’s most powerful attractions for long-term holders. Over a 20-year period, the cumulative saving on annual property taxes alone (compared to holding equivalent property in London, Paris, or Mallorca) can be substantial – easily running to six figures.
What are the actual costs of buying property?
While ongoing taxes are zero, the upfront transaction costs are real and significant. According to the Knight Frank Monaco buying guide, total transfer and notary costs are approximately 6% of the purchase price for individuals and Monaco civil company structures (SCIs). For other corporate structures, the figure rises to approximately 9%.
The 6% breaks down roughly as follows:
- Registration duty (droit d’enregistrement): The primary component. Levied by the Monaco government on the transfer of real property
- Notaire fees: Monaco notaires are appointed by the Prince and act as neutral parties in all property transactions. Their fees are regulated and calculated as a percentage of the transaction value
- Administrative and miscellaneous charges: Land registry, document preparation, and other procedural costs
For a EUR 10 million purchase by an individual or SCI, total costs would be approximately EUR 600,000. That’s the friction cost of entry. For the same property held through a foreign corporate structure, the cost rises to approximately EUR 900,000.
Agency commission is separate from the notary costs. Where an agent is involved, commission typically runs to 3-5% of the purchase price. This is usually paid by the seller, but arrangements vary. On a EUR 10 million transaction with a 3% agent fee, that’s an additional EUR 300,000 in the total cost chain.
How does Monaco’s inheritance tax work?
Monaco’s inheritance tax rates are set by the Monaco government and depend entirely on the relationship between the deceased and the heir. For the closest family relationships, the rate is zero. That’s a significant planning advantage for UHNWI families with multi-generational wealth.
| Relationship to deceased | Inheritance tax rate |
|---|---|
| Spouse | 0% |
| Children and parents (direct line) | 0% |
| Siblings | 8% |
| Uncles, aunts, nephews, nieces | 10% |
| Unrelated parties | 13%+ |
Source: Monaco government service portal (monservicepublic.gouv.mc). Rates apply to assets situated in Monaco.
Compare this to the UK, where inheritance tax is charged at 40% on estates above the nil-rate band (GBP 325,000 per person). Or France, where inheritance tax on direct-line heirs can reach 45% for large estates. The savings for a family passing on a EUR 20 million Monaco property are enormous: zero in Monaco versus potentially EUR 8-9 million in the UK or France. Our British buyers guide covers the UK inheritance tax position in detail.
This is one of the strongest arguments for Monaco as a base for multi-generational wealth. It’s not just about saving tax during your lifetime. It’s about what your children actually inherit.
Why are French nationals treated differently?
This is the most important caveat in Monaco’s tax story, and it trips up more buyers than any other single issue.
Under the bilateral fiscal convention between France and Monaco (signed 18 May 1963), French nationals who became Monaco residents after 1957 remain subject to French taxation on their worldwide income. They pay French income tax, French capital gains tax, and French wealth tax as if they were still living in France. The zero-tax benefits of Monaco residency simply don’t apply to them.
The 1963 convention was France’s response to wealthy French citizens relocating the 15 kilometres from Nice or Menton to Monaco to escape French taxation. President de Gaulle reportedly threatened an economic blockade if Monaco didn’t agree to the terms.
Who does this affect? Specifically:
- French nationals who established Monaco residency after 1957
- French nationals who were already resident before 1957 are generally exempt from the convention
- Dual nationals with French citizenship – the French nationality triggers the convention regardless of other citizenships
Who is NOT affected? Non-French EU citizens, British nationals, US citizens, and all other nationalities living in Monaco. For them, the zero-tax regime applies fully.
What about company tax and corporate ownership?
Monaco does have a corporate tax regime, but it’s narrowly applied. Companies incorporated in Monaco that derive more than 25% of their turnover from activities outside the principality are subject to corporate tax at a rate of 25% on profits (as of the most recent rate, aligned with France’s standard corporate tax rate).
Companies that operate entirely within Monaco – or derive less than 25% of revenue from outside – pay no corporate tax. This means a Monaco-based property holding company with no external revenue has no corporate tax liability.
VAT applies at 20%, harmonised with France. This affects commercial activities, goods and services, and crucially, new build property transactions (which may be subject to VAT rather than registration duties).
What is an SCI and should you use one?
An SCI (Societe Civile Immobiliere) is a civil company structure specifically designed for holding real estate. It’s the most common corporate vehicle for property ownership in Monaco, and it offers several practical advantages over direct personal ownership.
Why buyers use SCIs:
- Succession planning: Shares in an SCI can be transferred to heirs during the owner’s lifetime, gradually passing control of the property without triggering a full property transfer and its associated costs
- Privacy: The SCI is the registered owner, not the individual. This provides an additional layer of privacy for buyers who prefer not to have their name on public property records
- Multiple ownership: An SCI can have multiple shareholders, making it straightforward for family members or business partners to co-own property with clear governance rules
- Flexibility on disposal: Selling shares in an SCI can be more flexible than selling the underlying property directly, though the tax and cost implications differ
The cost implication: property purchased through a Monaco-registered SCI attracts the same ~6% transfer duty as individual purchases. Our investment returns analysis models the full cost chain for a worked example. But if the SCI is registered outside Monaco, or if another corporate structure is used, the rate rises to approximately 9%.
SCIs aren’t right for everyone. They add administrative complexity, require annual accounting, and the setup costs are non-trivial. For a straightforward purchase by an individual or couple with clear succession plans, direct ownership may be simpler. But for UHNWI families with complex structures, multiple heirs, or privacy requirements, an SCI is often the default choice.
Professional advice on structuring is essential. The interaction between Monaco law, the buyer’s home country tax obligations, and any applicable double tax treaties makes this a specialist area. A Monaco-qualified notaire and an international tax adviser should both be involved before any structure is finalised.
How does Monaco compare to Andorra and Switzerland?
Monaco, Andorra, and Switzerland are the three European jurisdictions most frequently compared by UHNWI buyers seeking tax-efficient residency. Each offers genuine advantages, but the profiles are meaningfully different.
| Tax element | Monaco | Andorra | Switzerland (lump-sum) |
|---|---|---|---|
| Income tax | 0% | Max 10% | Forfait fiscal (lump sum based on living expenses, not income) |
| Capital gains tax | 0% | 0-15% (on property held <10 years) | Included in lump-sum calculation |
| Wealth tax | 0% | 0% | Cantonal wealth tax applies (varies by canton) |
| Annual property tax | None | Minimal (based on cadastral value) | Cantonal and municipal property tax |
| Inheritance tax (direct line) | 0% | 0% | 0% in most cantons (varies) |
| Residency cost | EUR 500,000+ bank deposit | EUR 50,000 deposit + EUR 400,000 investment | Minimum lump-sum tax CHF 250,000-400,000+ per year (canton dependent) |
| Property price per sqm | EUR 51,967 (2024 avg) | EUR 3,000-6,000 | CHF 15,000-30,000+ (Geneva, Verbier) |
| Purchase costs | ~6% (individual/SCI) | ~4-5% (ITP transfer tax) | ~3-5% (notary, land registry, transfer tax) |
Sources: Monaco government, Govern d’Andorra, Swiss cantonal tax authorities. Andorra and Switzerland rates are indicative and vary by structure and canton. Professional advice essential in all jurisdictions.
The honest assessment: Monaco is the most tax-efficient of the three on paper, but it’s dramatically more expensive to buy into. A UHNWI with EUR 5 million to deploy on property gets roughly 96 square metres in Monaco, 1,000+ square metres in Andorra, or a substantial chalet in Verbier. The “right” choice depends entirely on the buyer’s priorities: absolute tax efficiency (Monaco), value for money (Andorra), or a blend of prestige, lifestyle, and moderate tax savings (Switzerland).
For a full comparison of these three jurisdictions across 12+ criteria including lifestyle, schools, healthcare, and connectivity, see our dedicated Monaco vs Andorra vs Switzerland comparison guide.
Key takeaways
- Zero personal taxation for residents – no income tax, no capital gains, no wealth tax, no annual property tax. Established since 1869 and unchanged (Monaco Government).
- Purchase costs of ~6% for individuals and SCIs – rising to ~9% for other corporate structures. New builds may attract VAT (20%) instead (Knight Frank).
- Inheritance tax at 0% for spouses and direct-line heirs – 8% for siblings, 10% for uncles/aunts, higher for non-relatives (monservicepublic.gouv.mc).
- French nationals are the critical exception – the 1963 bilateral convention means French citizens remain subject to French taxation even as Monaco residents.
- SCI structures offer succession and privacy advantages – but add complexity and administration. Not necessary for all buyers.
- Monaco is the most tax-efficient but most expensive of Europe’s low-tax options – Andorra offers better value, Switzerland offers prestige with moderate tax savings. The choice depends on priorities.
Frequently asked questions
Does Monaco have income tax?
No. Monaco does not levy personal income tax on residents. This has been the position since Prince Charles III abolished it in 1869. The exception is French nationals who became residents after 1957, who remain subject to French income tax under the 1963 bilateral convention.
Is there capital gains tax on property sales in Monaco?
No. Monaco does not charge capital gains tax on the disposal of property or any other assets. If you buy a property for EUR 5 million and sell it for EUR 8 million, the EUR 3 million gain is tax-free for Monaco residents (excluding French nationals).
What are the inheritance tax rates in Monaco?
0% for spouses and direct-line heirs (children, parents). 8% for siblings. 10% for uncles, aunts, nephews, and nieces. 13%+ for unrelated parties. Source: Monaco government service portal (monservicepublic.gouv.mc).
How much are the purchase costs when buying in Monaco?
Approximately 6% of the purchase price for individuals and SCI (Societe Civile Immobiliere) structures. Approximately 9% for other corporate structures. New build purchases may be subject to 20% VAT instead. Source: Knight Frank Monaco buying guide.
Do French citizens benefit from Monaco’s zero tax?
No. Under the 1963 bilateral fiscal convention between France and Monaco, French nationals who established residency after 1957 remain subject to French taxation on worldwide income. This includes income tax, capital gains tax, and wealth tax. Non-French nationals are not affected by this convention.
What is an SCI and why is it used in Monaco?
An SCI (Societe Civile Immobiliere) is a French-law civil company structure used for holding real estate. In Monaco, it’s the most common vehicle for property ownership because it offers succession planning advantages (shares can be transferred to heirs gradually), privacy (the SCI is the registered owner, not the individual), and flexibility for multiple owners.
Is there VAT on property purchases in Monaco?
VAT at 20% (harmonised with France) may apply to new build purchases where the property is being sold for the first time. Resale transactions are subject to transfer duties (~6%) rather than VAT. The exact treatment depends on the specific transaction – always verify with a notaire.
What is Monaco’s corporate tax rate?
Companies generating more than 25% of their turnover from outside Monaco pay corporate tax at 25% on profits. Companies operating entirely within Monaco, or deriving less than 25% of revenue externally, pay no corporate tax.
How does Monaco’s property tax compare to Spain?
Monaco has no annual property tax. Spain levies IBI (Impuesto sobre Bienes Inmuebles) at 0.4-1.1% of cadastral value, plus wealth tax in some regions. For a EUR 5 million property, the annual tax saving in Monaco versus Spain could be EUR 20,000-50,000 or more per year, depending on the region and structure.
What social security contributions do Monaco residents pay?
Monaco residents contribute to the CCSS (Caisses Sociales de Monaco) for healthcare and social coverage. Contributions vary by employment status – employed individuals contribute through payroll deductions, while self-employed and non-working residents contribute based on their category. Coverage includes access to Monaco’s healthcare system.
Is Monaco a better tax destination than Andorra?
On headline tax rates, yes – Monaco charges 0% income tax versus Andorra’s maximum 10%. But Andorra’s property is roughly 10 times cheaper per square metre, and the residency requirements are less demanding. The total cost of establishing yourself in Monaco (property + bank deposit) is dramatically higher than Andorra, so the “better” option depends on wealth level and priorities.
Can I avoid UK inheritance tax by owning property in Monaco?
Not automatically. UK inheritance tax is based on domicile, not residence. A UK-domiciled individual who becomes Monaco resident may still be subject to UK IHT on worldwide assets, including Monaco property, under the deemed domicile rules (UK residents for 15 of the previous 20 tax years). Professional UK and Monaco tax advice is essential for succession planning. This is not a simple relocation play.
Sources
- Monaco Government Service Portal (monservicepublic.gouv.mc) – Official inheritance tax rates, residency requirements, government tax guidance
- Knight Frank – Monaco Buying Guide – Purchase costs, transaction process, SCI structures, tax overview
- IMSEE – Institut Monegasque de la Statistique et des Etudes Economiques – Property price data referenced for purchase cost calculations
- Govern d’Andorra – Andorra tax rates for comparative purposes
- Savills – Spotlight Monaco 2025 – Market context and rental data