How to buy Monaco real estate ?

18 September 2023

Monaco, a jewel spanning only 2.1 square kilometers, attracts both affluent families and savvy investors. Owning property in the Principality of Monaco means entering the world of elite real estate investments. Monaco’s allure lies in its intelligent tax policies, top-notch healthcare, and luxurious Mediterranean lifestyle. If you are considering investing in Monaco real estate, this guide will help you navigate the process step by step.

1: Find a Trusted Real Estate Partner

To kickstart this process, you need to find a real estate partner who understands Monaco’s specific and ever-evolving market. Our agency, BLS Real Estate Monte-Carlo, is a local agency specializing in the Monaco real estate market and will be your ideal partner, whether you are new to Monaco or looking to expand your real estate portfolio. We will assist you in your search and find the property of your dreams in the heart of the Principality of Monaco.

2: Craft Your Purchase Proposal

After identifying your ideal residence, it’s time to formalize a detailed acquisition proposal. This proposal should include your personal information, a comprehensive description of the property in question, your financial offer, and a precise timeline for finalizing the agreements.

According to Monaco’s laws governing real estate transactions, sealing the purchase of the property requires a mandatory deposit of 10% of the agreed purchase price. This deposit is entrusted to a Monegasque notary and becomes the property of the seller upon acceptance of your proposal.

It’s important to note that once your offer is accepted, it is in no way possible to revoke the commitment made. Therefore, making a well-thought-out decision before proceeding is crucial.

3: Choose a Notary

After the seller accepts your proposal, the next step is to select a notary, a crucial decision to be made by the parties involved, namely yourself as the buyer and the seller. This choice can materialize as a single notarial entity representing both parties or separate notaries acting for each party.
It is imperative to emphasize the fundamental role of notaries in the sales process, extending beyond mere formality. They provide essential legal and financial advice to ensure the transaction’s compliance with relevant laws and regulations. Additionally, it should be noted that in some situations, buyers may engage specialized legal advisors to address specific aspects such as validating the property as a primary residence or estate planning.

4: Sales Agreement

Although not always necessary, it may be recommended to establish a sales agreement, especially in the presence of special conditions that require particular attention. This additional agreement supplements your initial offer and addresses various crucial aspects, such as financing, potential property modifications, and future plans.

It should be noted that in some cases, real estate properties are subject to government preemptive rights, which could result in a delay in the sales process, sometimes up to a month or even a complete cancellation of the transaction. However, in the majority of cases in Monaco, the transition occurs directly from the offer to the official sales agreement, which comprehensively covers all elements related to the transaction, including financial aspects and government preemptive rights, if applicable.

5: Land Registry Verification

Following the signing of the preliminary sales agreement, a crucial step occurs: the notary’s verification of the Monaco Land Registry. This process aims to confirm the legitimacy of the property held by the seller and examine the prevailing regulations that could impact the property in question. Additionally, a thorough check of the identities of all parties involved is conducted to ensure compliance with applicable laws and regulations.

6: Completion of the Purchase

The finalization of the real estate purchase process takes place when signing the official sales agreement, a step that occurs at the notary’s office. This formality can be done in person or delegated to a legal representative acting on your behalf. However, before reaching this stage, it is imperative to settle the remaining amounts of the purchase price, registration fees, as well as notary or real estate agent fees, all of which are paid into the designated notary’s account.

Regarding fees related to resale real estate, they are generally around 6% of the purchase price, encompassing registration fees (4.5%) and notary fees (1.5%). This fee structure remains the same, whether it is an individual or a Monegasque civil real estate company (SCI).

In the case of representing a foreign entity, registration fees are increased to 7.5%, bringing the total to 9% when including notary fees (1.5%). For new properties or properties under construction, they are subject to a 2.5% fee calculated based on the property’s value, with 1.5% for notary fees and 1% for registration fees.

It should be noted that in the case of financing the purchase with a mortgage, additional fees of 0.92% apply to the loan amount, and other possible fees may occur depending on the chosen financing type.

Additional Information:
When purchasing a property already occupied by tenants, it is important to note that they generally do not have preemptive rights unless explicitly stipulated in the current lease agreement. In the absence of such a provision, it is essential to adhere to the terms and conditions of the ongoing lease before taking full possession of the property.

Furthermore, it is important to refer to Law No. 1,291, which governs the conditions for reclaiming a property. According to this law, it is possible to reclaim a property with a six-month notice, provided it is either your primary residence or that of your child. This legislation provides a legal framework for situations involving the recovery of real estate for personal purposes.

Acquiring real estate in Monaco is a complex process that allows no room for error. We strongly encourage you to contact us to benefit from our expertise and informed guidance throughout your real estate journey in the Principality of Monaco. Our experienced team is dedicated to assisting you at every critical phase of your Monegasque real estate journey. Feel free to reach out to us to ensure the success and compliance of your real estate transaction in Monaco.