Lifestyle

The Sky is the Limit for Luxury Property Investment in Monaco

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The Wealth Report 2018 ranks Monaco as a top destination for high end property investment.

Author: Hanushka Toni

The recent Knight Frank Wealth Report 2018 listed Monaco within its top destinations for wealthy individuals looking to move and buy property. Its Prime International Residential Index (PIRI) grades high end property prices in 100 cities around the globe. Unsurprisingly, Monaco ranked at the top, along with Shanghai, Singapore, Sydney and Dubai. The small Principality has long been a magnet for international wealth. Its favourable tax regime, warm Mediterranean climate, and connectivity have boosted Monaco luxury real estate as an asset class.

Luxury residential prices in Monaco have climbed over the past ten years. According, to Knight Frank research, property in Monaco is now the most expensive in the world – with one million US dollars buying just 16 square meters of space. This is equivalent to the size of a small kitchen in most family homes.

H2 Low income taxes driving demand for luxury Monaco property

One of the main driving forces for Monaco’s attractiveness as a jurisdiction are the low taxes. Whereas most European countries charge income tax on earnings at a rate between 20% to 42%, Monaco has no income tax at all. 

Recent legislative changes to the UK non-dom rules have seen a substantial number of British people relocate to the Principality. Living in Monaco allows British non-doms to benefit from favourable tax treatment without being assessed for onerous UK taxes on income and inheritance. This has boosted demand for both rental and sales property.

Given that those relocating to Monaco for tax reasons often have vast fortunes to shield, the properties they look for are often the best in class.  Monaco apartments with sea views and outdoor terraces are highly desirable. Area wise, Monaco homes located in both the Carré d’Or and Fontvieille are particularly popular for their cachet and family friendly facilities.

Foreigners relocating to the country tend to rent apartments over houses. This is primarily due to the fact that housing stock in Monaco is virtually non-existent. The small country is one of the most densely built residential metropolises on earth. Apartment buildings in Monaco vie for attention, each looking to outdo the other in terms of number of floors and residential units.

H2 Monaco – a safe place to live

It is not only the attractive tax regime and good weather which has positioned Monaco near the top of the rankings for the best place to move. Safety is another key consideration that many expats, especially those with families, take into consideration when buying property in Monaco.

A considerable number of residents view investing in Monaco as a safe haven – both for their wealth and for their families. Some have moved from less stable jurisdictions where cowboy capitalism and different business practices present an element of risk to their families.

Monaco addresses all these concerns. The crime rate is low, the country is well-policed with tightly controlled borders and politically, it is insulated from tribulations on the global stage. Children can be educated within walking distance of the family home. For example, La Condamine is also a popular neighbourhood for families looking to rent a flat near the International School of Monaco.

H2 Monaco property – a good investment

The fact that Monaco real estate has experienced a protracted phase of positive growth gives confidence to those who are relocating. Rising prices for Monaco apartments are indicative of both the constrained supply of new stock and also the attractiveness of homes in general. Many will move to Monaco and buy an apartment, knowing that their investment will continue to gain in value and will also be a liquid one should they need to sell.

To rehash the old cliché, it’s Monaco and the future is bright. This upwards trajectory for Monaco real estate promises to continue, so long as the factors discussed remain in place.

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