Monaco – Property Letting

How does the property letting process work in Monaco?

Monaco’s rental market operates within a highly formalised structure that differs markedly from the more flexible landlord–tenant arrangements found in many other countries. Before a property is offered for rent, the landlord must first determine which legal regime governs that property, since this dictates who may legitimately occupy it, what rent may be charged, and what administrative steps must be taken.

The rental landscape is divided into two principal regulated categories: the protected sector, governed by Law 1235 as modified by Law 1291, which enforces rent caps and detailed tenant eligibility requirements; and the liberalised sector, governed by Law 887, which grants landlords somewhat greater freedom in setting rents while still restricting the pool of eligible tenants. Properties in newer buildings that fall under neither law are subject to open-market conditions, with rents and lease terms agreed freely between the parties.

In the free-market sector, leases typically run for one year on a renewable basis, and sometimes for three years. This bears a broad resemblance to short assured tenancy frameworks used in some other jurisdictions, although Monaco has no centralised public database for recording private tenancies — something that does exist in certain other countries, such as particular Australian states.

Where a property is subject to Law 1235/1291, the process is considerably more formal. The Housing Department must endorse the lease agreement before it is signed by either party, and landlords must submit documentation establishing the proposed tenant’s eligibility under the law’s priority criteria. Landlords are also required to share with tenants the references used to calculate the rent before the lease is executed, ensuring transparency throughout the process. Any failure to observe these procedures may attract administrative or criminal consequences.

In practice, the vast majority of Monaco lettings are handled by licensed real estate agencies, which manage everything from marketing and tenant screening to documentation preparation and Housing Department liaison. Properties tend to be advertised through agency networks and websites rather than open listing portals. A written schedule of condition (état des lieux) is prepared both when a tenant moves in and when they vacate. The entry inventory is generally the tenant’s responsibility, while the exit inventory is generally the landlord’s. This record of the property’s exact condition at both stages is essential to assessing any deterioration or damage at the conclusion of the tenancy.

What types of rental arrangements are available in Monaco — long-term, short-term, and holiday lets?

Long-term residential letting constitutes by far the predominant form of rental activity in Monaco. Under the regulated frameworks, lease agreements must run for a minimum of six years, providing tenants with considerable security of tenure. A tenant may bring their lease to an end with three months’ notice, but a landlord’s ability to terminate is restricted to a narrow set of prescribed circumstances, such as carrying out substantial redevelopment, creating additional living space, or undertaking essential structural works.

Short-term and holiday letting represent an entirely different picture. While such arrangements are not prohibited in Monaco, they are uncommon in practice. Most landlords are unwilling to shoulder the operational demands that come with short stays, particularly when the assets involved are of substantial value. The potential VAT implications associated with this type of activity introduce a further layer of complexity and serve as an additional deterrent.

It is worth noting that many online listings described as being in Monaco actually relate to Beausoleil, the adjoining French commune across the border. As for tenants who might consider subletting during high-profile events such as the Formula 1 Grand Prix: this is almost invariably prohibited by the terms of the lease or the building’s regulations. Landlords contemplating the short-term holiday rental market should proceed with great caution and take targeted legal advice before doing so.

Those who do let furnished accommodation on a tourist basis should be aware of the applicable tax treatment. Even though such activity is not subject to income tax in Monaco, it may nevertheless attract VAT liability where the relevant conditions are satisfied. Given Monaco’s customs union with France, VAT rules in the Principality broadly follow French rates and classifications. Anyone considering listing a property on a short-let platform should confirm the current position with a Monaco-qualified lawyer or tax adviser before proceeding.

What rental income can landlords expect in Monaco, and how are rates set?

The method by which rent is determined in Monaco depends entirely on the legal framework applicable to the property in question. The Principality ranks among the most expensive rental markets anywhere in the world: in 2024, average sale prices reached a record of €51,967 per m², a figure that inevitably shapes rental expectations. Despite these exceptional capital values, rental yields tend to be comparatively modest.

The Monaco rental market clearly tilts in favour of landlords. Average gross yields on residential assets are relatively low — around 1.5% — which limits the incentive to renovate or upgrade. Landlords in the free-market sector are free to set rents as they see fit and may include indexation clauses allowing for upward revision; downward adjustments are rarely contemplated and are often expressly excluded.

For properties falling under Law 1235/1291, rents are subject to strict controls. The legislation imposes detailed rules on how rents are initially set and subsequently reviewed, with the objective of preventing excessive increases and ensuring a degree of stability for tenants. The allowable price per square metre is defined and overseen by the Housing Department, which operates under the supervision of the Principality’s Ministry of Finance.

Rents must be determined from the outset by reference to comparable properties sharing the same location, characteristics, and legal classification. Any subsequent increase is subject to strict limitations tied to movements in the consumer price index. Where disagreements arise, the rent arbitration commission may be called upon to adjudicate. Under Law 887, rent may be freely agreed between landlord and tenant, and a rental indexation clause pegged to the ICC (Cost of Construction Index) may be incorporated to allow adjustments in line with inflation. Landlords should consult the Government of Monaco and the Housing Department for current reference rents and applicable caps, as these are subject to periodic review.

Do landlords need to provide a furnished or unfurnished property in Monaco?

Monaco imposes no blanket statutory obligation requiring landlords to let their properties either furnished or unfurnished. Both arrangements exist in the market, with the choice largely driven by the type of property, the intended tenant profile, and what is agreed between the parties. At the premium end of the free market, fully furnished lets are common, reflecting the preferences of internationally mobile residents who have no wish to transport household goods across borders.

In the regulated sectors governed by Laws 1235/1291 and 887, there is no legal requirement to provide furniture, but the property must be in a condition fit for the residential purpose for which it is being let. Landlords carry a legal obligation to hand over the property in a suitable state for its intended use, to maintain it in that condition throughout the duration of the tenancy, and to guarantee the tenant’s quiet enjoyment of the premises. This obligation applies regardless of whether the let is furnished or unfurnished.

Where a furnished property is let on a short-term basis for tourist purposes — a relatively uncommon but possible arrangement in Monaco — the furnished classification carries direct tax implications, most notably in relation to potential VAT liability as described elsewhere in this guide. For longer-term furnished lets within the free-market sector, the standard of furnishing is typically addressed contractually rather than by statute. Landlords should clarify specific requirements with their letting agent and, where appropriate, seek guidance from a legal adviser with expertise in Monaco’s tenancy framework.

Do you need a licence or registration to let a property in Monaco?

Monaco does not operate a general landlord licensing regime equivalent to the mandatory registration schemes found in countries such as Scotland or Ireland. However, the regulated letting sectors impose procedural requirements that serve a broadly similar function. Landlords whose properties fall within the scope of Law 1235/1291 must submit documentation to the Housing Department and obtain its endorsement of the lease before it becomes binding.

The responsibility for submitting all supporting materials to the Housing Department — demonstrating the eligibility of the prospective tenant — rests with the property owner or their appointed management agency. Letting under this regime demands adherence to a highly structured legal framework, with obligations falling on both landlord and tenant. Non-compliance can result in administrative or criminal consequences.

For properties in the free-market sector, no pre-letting registration is required. Nevertheless, the lease must be properly drafted and must conform with local notarial and contractual standards, as applies to all property transactions in Monaco. Where a property is being let under a managed short-term arrangement, VAT registration may become necessary depending on the nature of the services being provided alongside the accommodation.

Non-resident landlords are not subject to any additional licensing requirements arising from their non-resident status, but may encounter more rigorous due-diligence expectations from agencies and the Housing Department. They should also ensure that appropriate tax representation arrangements are in place. Readers are advised to confirm current requirements directly with the Direction du Logement (Housing Department), as procedural requirements may be updated from time to time.

How do you obtain a landlord licence or register as a landlord in Monaco?

For landlords letting within the Law 1235/1291 protected sector, engagement with the Housing Department represents the closest functional equivalent to formal landlord registration. The steps set out below describe the typical process as it stands in 2025; landlords should always verify current requirements directly with the Housing Department, as procedures are subject to change.

1. Determine your property’s legal regime. Before taking any other steps, establish whether your property falls under Law 1235/1291, Law 887, or the free-market sector. This typically requires checking the age of the building (pre- or post-1 September 1947) and reviewing the property’s existing documentation. A licensed Monaco estate agent or lawyer can advise.
2. Identify eligible tenants. A defining feature of the Law 1235/1291 framework is its precise definition of those who may lawfully occupy regulated properties, referred to in the legislation as “protected persons.” Priority is accorded to individuals with a strong and enduring connection to Monaco, with Monegasque nationals placed at the head of the priority order in recognition of their status in the Principality.
3. Prepare supporting documentation. Gather proof of the property’s details and the proposed tenant’s eligibility (identity documents, proof of nationality or long-term residency, employment details where relevant under Law 887).
4. Submit documentation to the Housing Department. Once a tenant is selected, the lease agreement must be endorsed by the Housing Department before signing. Submit all required documents, together with the draft lease, to the Direction du Logement.
5. Await endorsement. The Housing Department reviews the submission and, if satisfied, endorses the lease. Only once this endorsement is obtained may the lease be formally signed by both parties.
6. Sign the lease and complete the inventory. Both parties sign the endorsed lease. An inventory of fixtures (état des lieux) is completed at the point of key handover, signed by both parties or their representatives.
7. Notify the relevant authorities if required. Any sale of a property governed by regulated law must be reported to the Minister of State, who holds a right of first purchase enabling the State to acquire the property ahead of any third party in order to preserve the stock of protected housing. Comparable notification obligations applicable to letting transactions should be verified with a local adviser.

For free-market properties, steps 2–4 above do not apply, and landlords may proceed directly to lease drafting, signing, and the completion of the inventory. No formal application fees are charged by the Housing Department for its endorsement role in the regulated sector, though engaging a licensed agent — which is strongly advisable — will give rise to agency fees, as described in the section on letting agents below. Verify current procedures and any administrative charges at the Government of Monaco’s official website.

What are the rules around deposits in Monaco?

Monaco does not maintain a statutory tenancy deposit protection scheme comparable to those operating in the United Kingdom and Ireland, where deposits are required by law to be held by an independent third party. In Monaco, the deposit is ordinarily retained by the landlord directly or, where a managing agent has been appointed, by that agency on the landlord’s behalf. No government-backed custodial scheme or mandatory third-party holding arrangement exists under current law (as of 2025).

The security deposit is typically equivalent to between three and six months’ rent, varying by agency. Its purpose is to cover the cost of any repairs needed or the restoration of the apartment to its original condition at the end of the tenancy. In practice, deposits frequently amount to three or four months’ rent inclusive of charges. This sum is not designed to address unpaid bills but rather to fund the remediation of damage, repainting where required, or other necessary works. The deposit is returned to the tenant upon the conclusion of the lease, provided the property is handed back in an acceptable state.

A deposit equivalent to three months’ rent and charges is a common benchmark, with repayment to the tenant falling due within two months of the lease ending, subject to any justified deductions. Where an agent holds the deposit on behalf of the landlord, the two-month repayment period runs from the agent’s receipt of authority from the owner to make the return. Deductions must be supported by reference to the inventory of fixtures prepared at both the start and end of the tenancy. Landlords should confirm current rules and any applicable caps with the Housing Department or a qualified Monaco lawyer, as this area of law may evolve over time.

Who is responsible for maintenance and repairs in Monaco?

Monaco’s approach to maintenance and repair obligations broadly reflects the civil law tradition shared with France and other continental European jurisdictions. Under this framework, the landlord bears primary responsibility for structural and significant repairs, while the tenant is expected to attend to routine upkeep and minor day-to-day maintenance. This contrasts with common-law systems — such as those in Ireland and the UK — where comparable responsibilities are typically codified in dedicated residential tenancy legislation.

Landlords are legally obliged to deliver the property in a condition suitable for its intended residential use, to keep it in that condition throughout the tenancy, and to ensure the tenant’s peaceful enjoyment of the premises. That said, private lease agreements in Monaco frequently impose broader maintenance obligations on the tenant than the law strictly requires. It is commonplace, for example, for the tenant to be contractually required to repaint the entire apartment before vacating.

In the regulated sectors, the property must be in an adequate state of habitation at the point of letting, and landlords cannot seek to pass the cost of improvements on to departing tenants. Responsibility for structural elements — including the roof, foundations, and building fabric — remains with the landlord. Disputes over maintenance responsibilities between landlord and tenant in the regulated sector may ultimately be referred to Monaco’s civil courts or, in rent-related matters, to the rent arbitration commission.

Given the absence of a highly codified statutory framework specifically addressing these obligations, it is strongly advisable to include detailed maintenance schedules in the tenancy agreement, clearly distinguishing which responsibilities fall to the landlord and which to the tenant. Conducting a thorough signed inventory at the outset of the tenancy provides the most effective protection for both parties should a dispute arise later.

How are letting agents used in Monaco, and what do they charge?

Licensed letting agencies (agences immobilières) occupy a central position in Monaco’s rental market and are involved in the overwhelming majority of transactions. Given the regulatory complexity of the framework — especially for properties subject to the protected sector — their involvement is not merely a matter of convenience but is often practically indispensable. Agents typically manage property marketing, tenant identification and vetting, document preparation, Housing Department liaison, lease drafting, inventory preparation, and ongoing property management.

Unlike the United Kingdom, where the Tenant Fees Act 2019 prohibited letting agents from charging tenants certain fees, Monaco has no equivalent statutory prohibition. Agency fees are customarily shared between landlord and tenant, though the precise allocation varies between firms and is governed by the terms of the appointment. It is common practice in Monaco for landlords to request several months’ rent in advance — typically three to four months, though in some cases up to a full year depending on the property and the owner’s preference. These advance payments are entirely separate from agency fees.

Agent commission for successfully sourcing a tenant is typically around one month’s rent, and sometimes more for higher-value properties, though this figure is not regulated by statute and can vary considerably. Monaco has no capped fee structure comparable to those operating in some other markets. As of 2025, fee structures are set independently by each agency and should be confirmed directly with the firm in question before any mandate is signed. Ongoing property management fees are charged separately, commonly as a percentage of the quarterly rent collected. Always request a comprehensive written breakdown of all applicable fees before committing to an agency relationship.

What taxes apply to rental income in Monaco?

The tax treatment of rental income in Monaco is among the most advantageous to be found anywhere in the world for the majority of landlords. Monaco does not levy personal income tax — a position that has been maintained since 1869. There is one significant exception: French citizens residing in Monaco are bound by a bilateral agreement that subjects them to French tax law. For all other resident landlords, regardless of nationality, rental income generated in Monaco is simply not subject to personal income tax (as of 2025).

Monaco levies no wealth tax, no property tax, and no housing tax, placing the Principality in stark contrast to jurisdictions such as France — where rental income attracts both income tax and social charges — or the United States, where net rental income is taxed as ordinary income.

One fiscal charge does, however, apply to rental contracts: a leasehold duty equivalent to 1% of the annual rent plus estimated service charges, which is payable by the tenant rather than the landlord. For contracts running beyond three years, this duty may be paid by instalments. As of 2025, this represents the primary fiscal impost associated with a residential lease in Monaco.

For landlords who let furnished accommodation on a short-term tourist basis, VAT may become applicable. Although such activity does not attract income tax in the Principality, it may nonetheless be subject to VAT where the relevant conditions are satisfied. Monaco applies VAT in alignment with French regulations as a result of its customs union with France, at rates of 20%, 10%, 5.5%, and 2.1%.

Non-resident landlords must also consider their fiscal position in their country of tax residence or domicile. Monaco has concluded very few double taxation agreements, which may have implications for landlords whose income originates in jurisdictions not covered by such treaties. As of 2025, beyond the arrangement with France, the Principality has signed no further bilateral fiscal agreements. Anyone letting a Monaco property should take advice from a qualified Monaco tax specialist and, where relevant, from a tax professional in their home jurisdiction before proceeding.

What are the rules around ending a tenancy or evicting a tenant in Monaco?

Monaco’s rental legislation affords tenants in the regulated sectors a very high degree of protection, going considerably further in this respect than the frameworks found in many comparable jurisdictions. Landlords cannot end regulated leases at their discretion and are confined to a narrow and specific list of permissible grounds for doing so.

Under Laws 1235/1291, a landlord may only bring a lease to an end in limited circumstances: to carry out substantial works, to demolish or extend the building, or to reclaim the apartment for their own use or that of a family member. Crucially, in all such cases, the landlord must offer the displaced tenant equivalent alternative accommodation on equivalent terms. This obligation to rehouse the tenant goes substantially further than the practice in most other European countries, where providing alternative accommodation is not a duty imposed on landlords by statute.

Leases are subject to a minimum duration of six years and renew automatically unless brought to an end through the proper legal process. A tenant may terminate at any time by giving three months’ notice, ensuring security of tenure without compromising tenant mobility. The landlord’s ability to terminate, by contrast, is heavily circumscribed.

In the Law 887 sector, a tenant may terminate after one year with three months’ notice. A landlord’s grounds for termination under Law 887 include the demolition of the building for reconstruction with at least equivalent living space, the raising of the building, modifications intended to create new residential accommodation, or repairs required on grounds of health, hygiene, or public safety.

In the free-market sector, lease terms and rights of termination are a matter of contract, affording landlords considerably greater flexibility. Even so, any recovery of possession must follow due legal process through Monaco’s courts. Landlords must not attempt to retake possession informally, and should always obtain legal advice before serving any notice to terminate. Monaco does not have a specialist tenancy tribunal; disputes are resolved through the civil court system.

What should expat landlords know about managing property remotely in Monaco?

Managing a Monaco property from another country is entirely practicable and is indeed a common arrangement given the Principality’s substantial population of internationally mobile property owners. It does, however, demand careful legal and administrative preparation to ensure full compliance with Monaco’s regulatory requirements.

The most workable solution for most remote landlords is to appoint a licensed Monaco estate agency as property manager. Such agencies can handle rent collection, maintenance coordination, tenant communications, Housing Department correspondence, and inventory management on the landlord’s behalf. Given that regulated-sector properties require the owner or their appointed representative to submit documentation to the Housing Department, having a local presence is not simply a matter of convenience — it is a functional necessity.

For matters requiring formal authorisation — such as executing lease amendments, approving significant works, or initiating legal proceedings — a power of attorney (procuration) conferred on a Monaco-based lawyer or agent provides the necessary legal authority. This instrument must be properly executed in accordance with Monaco law and, if signed abroad, may need to be apostilled to be recognised locally.

On the tax side, Monaco imposes no income tax on individuals, including foreign investors and non-residents. However, as a non-resident property owner, it is essential to understand the fiscal obligations that apply in your country of tax residence. Monaco has concluded very few double taxation agreements, which may have consequences for landlords with income from jurisdictions not covered by existing treaties. Some countries — France among them — tax their residents on worldwide income, meaning that rental income from Monaco could be subject to tax in the landlord’s home country even where no Monegasque tax applies.

There are no specific restrictions on transferring rental income out of Monaco. The combination of no personal income tax, no barriers to cross-border financial flows, and generally favourable conditions for real estate investors makes the Principality an attractive proposition for foreign landlords and non-residents alike. That said, banking due diligence in Monaco is thorough, and landlords receiving rental income into Monaco accounts should anticipate rigorous Know Your Customer (KYC) requirements from their bank.

Frequently Asked Questions

Can a non-resident own and let property in Monaco?

Yes. There are no restrictions on foreign nationals owning or letting property in Monaco. Non-resident landlords are subject to exactly the same legal framework as residents when it comes to determining which rental law governs their property. It is advisable to appoint a reliable local agent or lawyer to manage Housing Department compliance, tenant relations, and any legal matters that may arise. As Monaco levies no personal income tax (as of 2025), rental income generated in Monaco is generally not subject to local taxation — though it may be taxable in the landlord’s country of tax residence.

Do I need a local agent to let my property in Monaco?

There is no statutory requirement to engage a letting agent, but for properties subject to Laws 1235/1291 or Law 887, the procedural obligations — including obtaining Housing Department endorsement of the lease — make professional assistance effectively indispensable. For free-market properties, while an agent is not legally mandatory, appointing a licensed local agency is strongly recommended given the market’s complexity and the importance of correctly drafting tenancy agreements in accordance with Monaco law.

What is the difference between Law 1235/1291 and Law 887 in Monaco?

Both Laws 1235/1291 and 887 are significant legislative instruments governing Monaco’s real estate rental market. Their principal purpose is to protect tenants and regulate the conditions under which accommodation may be let in the Principality. Law 1235/1291 applies to certain older properties and imposes rent controls alongside strict tenant eligibility criteria. Law 887 covers pre-1947 buildings not captured by Law 1235 and permits greater flexibility in rent-setting while preserving some tenant protections. More recently constructed properties generally fall outside both frameworks and are subject to free-market conditions.

How much deposit can I charge as a landlord in Monaco?

The security deposit is typically equivalent to between 3 and 6 months’ rent, depending on the agency involved. There is no statutory cap on the deposit amount in the free-market sector (as of 2025), though common practice tends towards three to four months’ rent plus charges. The deposit must be returned to the tenant within two months of the tenancy ending, net of any properly justified deductions for damage attributable to the tenant beyond fair wear and tear. Confirm the current position with a Monaco-qualified legal adviser, as the rules in this area may change.

Is rental income from Monaco taxed?

Monaco imposes no personal income tax on rental income received by residents of any nationality other than French nationals (as of 2025). French citizens residing in Monaco are governed by a bilateral agreement and must comply with French tax law accordingly. Non-resident landlords are similarly not subject to Monegasque income tax on their Monaco rental receipts. Nevertheless, landlords must consider their obligations in their home country, since many jurisdictions apply worldwide taxation to their residents. A leasehold duty of 1% of annual rent applies but is payable by the tenant, not the landlord. Seek advice from a tax specialist familiar with both Monaco and your home jurisdiction.

Can I let my Monaco property on Airbnb or other holiday platforms?

Short-term holiday lets are not prohibited in Monaco, but in practice they are uncommon. Most landlords are unwilling to take on the operational demands associated with short-stay guests, particularly in the case of high-value properties. The potential VAT exposure adds a further layer of disincentive. Where a tenant — rather than the landlord — contemplates subletting via such platforms, this is almost invariably forbidden by the lease agreement. Any landlord considering this model should take specific legal and tax advice before making the property available on any short-let platform.

Who sets the rent for regulated properties in Monaco?

A distinctive feature of Monaco’s regulated letting laws is the rent-control mechanism. Under these rules, the Housing Department is responsible for establishing the permissible rent levels, balancing the objective of affordability for tenants against a fair return for property owners. Rents for Law 1235/1291 properties cannot be freely determined by the landlord, and any subsequent increase must comply with strict rules tied to movements in the consumer price index. In the Law 887 and free-market sectors, rents may be negotiated freely between the parties. Current reference rent schedules published by the Housing Department should be consulted for up-to-date figures, as these are subject to periodic revision.

What happens if a tenant refuses to leave at the end of a Monaco tenancy?

In the regulated sectors, tenants benefit from very strong statutory protections, and leases renew automatically unless brought to an end through the correct legal procedure. A landlord seeking to recover possession must establish one of the limited statutory grounds for termination and, where the law requires it, must also offer the tenant equivalent alternative accommodation on comparable terms. Recovery of possession without following proper legal process is unlawful; enforcement must be pursued through Monaco’s civil courts. In the free-market sector, the lease terms govern, but court proceedings remain necessary for enforcement. Landlords facing a contested end of tenancy should engage a Monaco-qualified lawyer promptly.