Purchasing a property in Monaco is simple but it requires to follow a straight procedure. It is important to note that like few other countries worldwide, Monaco has notaries that are responsible for the transfer of ownership of a real estate property.
- The very first step, once you found a piece of real estate you would like to buy, is to sign a buying offer prepared by a real estate agent.
This contract should include the designation of the property (with lot number), its price, the date before which the sale should take place, the notary in charge of the transaction and any condition the Buyer would like to add. Along with the signed buying offer should be a 10% deposit cheque (that will later be cashed in by the notary) to show the seriousness of the Buyer.
- Secondly, the Seller needs to accept the Buying Offer by signing the contract.
- Once both parties have signed the Buying Offer, it is given to the designated notary, along with the deposit. At this stage, the notary will make sure that there is no issue with the sale of the property and will draft the contract to transfer the ownership and agree on the date of signature where both parties should be present along with the estate agent.
- At the signature date, both parties are present with the estate agent and sign in front of the notary the transfer of ownership. The same day the Buyer receives a certificate showing he is the new property owner, and the Seller receives his money.
There are few fees attached to the real estate transaction that should be considered:
- The registration fee: 4.5% of the transaction value
- The notary fee: 1.5% of the transaction value
- The agency fee: 3% for the Buyer and 5% for the Seller (plus 20% VAT).
Things to Consider
There are few specificities that apply to Monaco real estate market that one should know before making a Buying Offer.
- Once a Buying Offer is made, it is legally binding. There is no time to withdraw from an offer and if it is accepted by the Seller and the Buyer does not want to proceed, he will owe to the Seller the equivalent of 10% of the transaction value.
- The measurements of a property do not appear anywhere in the transaction. That’s why we strongly advise taking the measurements before making an offer in order not to have any surprise after the transaction is done.
Real Estate Special Law
Some apartments located in old buildings are ruled by some special laws that may have an impact on the property value. These laws only have an effect if the owner would like to rent his property out.
Law 887: If you buy an apartment under the law 887, you will only be able to rent it out to individuals that are:
-Family members of the property owner
-Individuals having the residency for at least 5 years and having a professional activity for at least 6 months
-Individuals working in Monaco for at least 5 years
The lease contract will have to be for a 6 years period minimum and could be resigned every year only by the tenant’s will.
There is no cap on the rent so the owner can ask for any monthly rent desired.
Law 1291: This law concerns any apartment being built before the 1st September 1947. Under this law, monthly rent is capped and chosen by the Government.
You will only be able to rent it to the following individuals in priority order:
– To Monegasque citizens
– To individuals born from a Monegasque citizen, or someone maried, widowed or divorced from one.
– To individuals born in Monaco that have always lived in Monaco since their birth on the condition that one of his parent was already living in Monaco at the moment of his birth.
– To individuals that have been living in Monaco for at least 4 years.