Monaco is a prime destination for property investment. This country offers good rental yields combined with capital appreciation. There are several ways for investors to finance an apartment in Monaco. Mortgages and bridging loans are particularly common for those wanting to buy on the Monegasque market. Another type of loan is reserved for Monegasques, provided that the purchase concerns the main family home.
The appeal of the Monegasque market for real estate investment
There are many advantages of investing in a luxury apartment in Monaco. Monegasque residents enjoy an exceptional location and a unique way of life. However, property investment in Monaco is reserved for the very wealthy, given the dizzying prices on the Monegasque market.
Buying a property in the Principality entitles you to tax benefits. Owning property in Monaco exempts you from income tax. Only French residents are not covered by this tax exemption. Their income is still taxed in France.
The Principality attracts investors looking for high rental yields. However, investing in real estate in Monaco is particularly attractive over the long term, thanks to capital appreciation. To find out more about profitability, read our guide to rental yields in Monaco.
Options for financing the purchase of an apartment in Monaco
Investors can opt for a standard loan, a mortgage or a bridging loan. Besides these loans and mortgages, there are other financing options, but these are reserved for Monegasque investors. Luxury real estate agencies will give you all the commercial, legal and financial information you need to finance an apartment in Monaco.
Mortgages
A mortgage is a common solution for financing an apartment in Monaco. This type of financing is granted by private banks to international investors and Monegasque residents. The mortgage conditions depend essentially on the sale price. This must be registered with a notary, subject to payment of registration fees of 0.65%.
There are several mortgage options available for investing in Monaco:
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- Fixed rate: the interest rate is fixed, providing stability in the payment of the capital.
- Variable rate: the interest rate follows the trend of a reference index determined by the bank.
- Mixed rate: this type of loan combines fixed rates for the first few years, followed by variable rates.
Bridging loan
There are plenty of reasons to invest in Monaco. Investors can also apply for a bridging loan to finance their property purchase. Offered by Monegasque banks, this method of financing allows you to wait for other assets to be liquidated.
The bridging loan enables investors to complete their investment quickly. This process gives them time to release other funds from the sale of a property, for example. In return, this loan carries a high interest rate.
Loans reserved for Monegasque nationals
To finance an apartment in Monaco, Monegasque nationals can also apply for a property loan. This type of loan is granted by lenders under the following conditions:
- the borrower must be of Monegasque nationality;
- the loan must be used to help purchase the main family home;
- the borrower must not own any other property in Monaco.
The maximum loan is €762,000. This sum takes into account the value of the property you want to buy and registration fees. Barring exceptions, the interest rate offered by the bank is 4%.
Put your trust in our Coletti Real Estate agency for your property purchase. Our team will be with you every step of the way, from selecting the right apartment to buy through to financing it. To optimise your investment, find out more about our property management and administration services.
