There are a number of legal procedures to complete ahead of a Monaco property changing hands and being registered in a new name. Here are the steps in detail.

In Monaco, the first stage of the legal process is when the buyer makes a formal written offer to purchase the property. This states the price that the buyer is willing to pay and how long the offer will be valid for (usually between two to five days). The offer becomes null and void after the validity period if the seller has not responded in time.

Once the offer has been accepted in writing by the seller, the parties appoint a Monaco notary (‘notaire’), it is possible that the same notary will act for both parties.

The role of the notary is crucial throughout all stages of the sale, from the preliminary searches through to sale and registration. 

In addition to the notary, who can also assist on the civil law and process to organise the future transmission of the asset, some buyers choose to appoint a lawyer to help with certain aspects of the purchase, such as, for example, estate planning.

Once the buyer’s offer has been accepted, the buyer and seller sign a preliminary contract called a ‘compromis de vente’. 

The buyer must pay a deposit. This is typically equal to 10% of the purchase price. The deposit should be paid into an escrow account held by the notary.

The notary then carries out due diligence, such as searches at the Monaco Land Registry, to confirm that the seller is the legal owner of the property and to determine any urban or other regulations that affect, or may affect, the property.

Before completion can take place, the remaining purchase price, the registration fees and notary/real estate agent fees must be paid to the notary. 

Signature of the sale deed takes place at the notary’s office. However, the buyer can sign at a distance via a power of attorney prepared by the notary.

After signature, the notary will register the sale with the Monaco Land Registry. In the interim period, after signature by the parties and before registration, the buyer receives a completion certificate (attestation de vente), which can be used as proof of ownership.

Purchase of real estate itself  

In general, on the purchase of "second-hand" property, costs and fees will amount to 6.25% of the purchase price and will be due by the Purchaser. This 6.25% comprises registration duty (4.75%) and notarial fees (1.5%). This rate applies where the purchase is made by individuals or a Monaco SCI.

A higher rate of 7.5% registration duty applies if the acquisition is made by, say, a foreign company: on top of this will be the notarial fees of 1.5% making a total due of 9% provided certain conditions are met by the structure in question (eg the appointment of a fiscal representative who identifies the ultimate beneficial owners). This 7.5% duty will increase to 10% as regards transactions involving entities whose beneficial owners are not individuals or entities of which the individual beneficial owners are not disclosed, so that in total 11.5% will be due in these circumstances

In some cases (e.g. where the property is new or under construction) registration duty will not apply and rather the sale price will include value added tax (TVA) at the rate of 20%. Notarial fees and transcription duty amounting to a total of 2.5% will be due, payable by the Buyer, regardless of whether the Buyer is an individual or a corporation.

Purchase of a foreign property-holding company  

Where the real estate is owned by a foreign company, the Buyer may possibly be able to buy this structure: in this case, registration duties of 4.5% on the property value will be levied on the change of beneficial ownership pursuant to the sale. 

Monaco levies no income taxes, capital gains taxes or wealth taxes on individuals. French nationals resident in Monaco nonetheless pay income tax and wealth tax in France in certain circumstances. 

Monaco gift and estate duties exist but only on Monegasque-sited assets. The rate of such duties is 0% on dispositions to parents, a surviving spouse, children or remoter issue. On other dispositions, gift and estate duties are due at differing rates depending upon the degree of relationship between donor and done; the maximum rate of 16% applies in the case of dispositions to non-relatives. Duty is payable by the recipient.  

Monegasque law will generally be paramount insofar as Monegasque real estate succession matters are concerned. In principle, if you own the real property in your own name and regardless of your nationality or where you reside, on your death, title to the property will pass in accordance with Monegasque law, which reserves a major portion of your estate to your descendants (legitimate and illegitimate). Where you have no descendants, your ascendants will largely benefit. 

It is also though now possible for an individual to choose his/her national law to govern his/her assets (including real estate) thus allowing the individual to dispose of his/ her assets free from any rules of reserved heirship.

In respect of personality, Monaco will refer to the succession laws of your country of nationality. 

Professional advice should be taken on the inheritance implications of your purchase in terms of the Monegasque rules of succession.