Monaco may be petite, but it’s an incredibly desirable place to live. Its under-1-square-mile in size and is designated as the second-smallest country in the world which adds to its elite status. Set on the Mediterranean Sea, in between the Italian Riviera and the French Riviera and with the French Alps as a backdrop, Monaco has an ideal location and beautiful weather year-round.

Monaco may be petite, but it’s an incredibly desirable place to live. Its under-1-square-mile in size and is designated as the second-smallest country in the world which adds to its elite status. Set on the Mediterranean Sea, in between the Italian Riviera and the French Riviera and with the French Alps as a backdrop, Monaco has an ideal location and beautiful weather year-round.

Real estate here is unparalleled as well. You can search for a duplex penthouse with breathtaking views, hotel residences that are fully serviced and even a small number of new-build villas on the shore. Surrounding your new home will be everything you could ask for: fine dining, luxury shopping, phenomenal entertainment, superyacht rentals, world-renowned casinos, and outdoor activities that range from golfing under sunny skies to skiing far up on the snowy mountains.

Aside from the remarkable properties and the Mediterranean lifestyle, buyers love Monaco because of its status as an investment safe haven. Both business and personal tax policies favor residents and are considered lenient compared to other nations. Moreover, anyone can buy property in Monaco, as long as you pass the background checks and have a certain amount of wealth. And since it’s a popular destination for expats, many English speakers live here, meaning you don’t have to be well-versed in French before arriving.

The Buying Process

The Monaco buying process is purposely designed to prevent either party from pulling out of the purchase once an offer is accepted. For example, an offer should include a “subject to finance” clause with specific details so that it can’t be used by the buyer as an easy way out of the purchase. Also, gazumping is not allowed, which is when the seller accepts the buyer’s offer but then refuses to sell the house to them if they’ve been offered more money from another interested party.

We’re going to cover each step of the buying process in more detail, but as an overview, here’s what to expect:

It’s always best to work with a property agent to find your new home in Monaco. They’ll know the ins and outs of the area and may even show you unlisted properties that other buyers don’t have access to. Plus, your property agent will be by your side throughout the entire buying process, which is particularly helpful for those who have never bought Monaco property before.

If you find a property in Monaco that you love, you may be able to move in sooner than you think. The complete sales transaction can take as little time as just a few days. However, depending on financing, particularly if you’re taking out a mortgage, it’s more common for the process to complete within a few months.

Note that if you’re not fluent in French, you may be required by law to have a translator with you during the sales transactions.

Making an Offer on a Property in Monaco

While the first natural step of the buying process is finding a property you want to purchase, the first legal step is making an official offer.

You (or your agent) will make a formal offer to the seller in writing. If it’s accepted by the seller, the offer will be binding for both the buyer and the seller. While this is just one of the first steps in the buying process, it’s an important one – remember, Monaco law makes it difficult for either party to back out of an agreed-upon real estate transaction.

The offer will state the price that the buyer would like to pay for the property, along with how long the offer will remain valid. That time period usually ranges from two to five days. After that period of validity, the offer will be void if the seller has not responded.

One of the biggest differences between buying property in Monaco versus buying property in France is that in Monaco, there’s no cooling-off period. French property buyers get 10 days after their offer is accepted to pull out of the purchase without penalty. In Monaco, there’s no such period. Again, it’s important to be positive you want the property before making an offer.

Choosing a Notaire

Next, both parties will appoint a notaire. It’s possible that the same notaire will be chosen by both the buyer and the seller, which is common.

The notaire plays an important and necessary role in buying property in Monaco, and they will be present through the rest of the purchase stages. Most notably, the notaire is responsible for drawing up the deed for the property and getting signatures from the buyer, seller and lender (if applicable).

At this point, some buyers may also want to hire a lawyer to help with other aspects of the purchase, such as estate planning. If you’re not fluent in French, you may also want your lawyer to carefully review and translate the documentation for you so that you know exactly what you’re signing.

Signing the Compromis de Vente and Paying a Deposit

The next step is for the notaire to draw up a formal, preliminary contract called the Compromis de Vente. This will include details of the sale up to this point – it’s possible that some details will change throughout the process; the final specifics will be reflected in the deed later on. Both parties will sign the Compromis de Vente.

At this stage, the buyer will also pay the deposit, which usually totals about 10% of the purchase price. The notaire will hold the deposit in an escrow account. At the end of the buying process, the deposit will be deducted from the sale price so that only the balance is owed, along with standard fees.

Conducting Land Registry Research

This next step is handled by the notaire. They will search the Monaco Land Registry to ensure that the seller legally owns the property (and can therefore sell it), and also to find out if there are regulations that could impact the property – and your purchase or ownership of it as a result. The notaire will also ensure that the land title is transferred from the seller to the buyer by checking with the Monaco Land Registry.

Completing the Purchase of Monaco Property

The process of buying property in Monaco is completed when the deed is transferred to the buyer and signed in the presence of the notaire at their office. However, if the buyer cannot be there in person, they may be allowed to sign from elsewhere through a power-of-attorney exception prepared by the notaire.

At this point, the balance of the sale price and any fees will also be paid by the buyer, including registration, agent and notary fees (more on the cost of fees below).

Registering the Sale of Property in Monaco

Once the sale is completed, the notaire will register it with the Monaco Land Registry. Between the time when the deed is signed and the property is registered, the buyer will receive an attestation de vente, which is a completion certificate that shows proof of ownership.

Costs and Fees Involved When Buying Property in Monaco

As mentioned above, the minimum deposit is typically 10% of the sale price. It will be paid early in the process, held in an escrow account by the notaire and deducted from the sale price during the last stage of the purchase.

Regarding fees for secondhand property, meaning property that isn’t brand new or in the process of being built, they’ll total approximately 6% of the purchase price and are to be paid by the buyer. In the case of a company acquiring the property instead of an individual purchasing it, fees may be higher at around 9%. Included in this cost is the notaire’s fee of 1.5%.

In the case of a buyer (whether the buyer is an individual or a corporation) purchasing a new property or a property that’s still under construction, fees total about 2.5%, and the sale price will also include the value added tax (VAT) at 20%.

Property agent fees are set at 3% plus VAT for buyers (they’re slightly higher for sellers). If you’re taking out a mortgage for the purchase, also expect to pay 1% of the mortgage amount in registration fees.

HOMEHUNTS property buyer agents are able to find the best luxury properties in Monaco based on your specific search criteria. Search our website to browse through our selection of luxury homes. You can also speak directly to one of our consultants by calling +33 (0)970 44 66 43.

The French lifestyle is hard to pass up, no matter what type of setting you like best – bustling city, peaceful countryside, snow-covered mountains, warm and sunny beachfront… But the question of securing a French mortgage – and all that it entails – can put a halt to your plans before they even get started.

In this guide, we’re going to explain the process of getting a mortgage in France as a foreigner so you can move forward with your dream of owning property in France.

The French lifestyle is hard to pass up, no matter what type of setting you like best – bustling city, peaceful countryside, snow-covered mountains, warm and sunny beachfront… But the question of securing a French mortgage – and all that it entails – can put a halt to your plans before they even get started.

In this guide, we’re going to explain the process of getting a mortgage in France as a foreigner so you can move forward with your dream of owning property in France.

Should You Buy Property in France?

France’s property market is one of the strongest in Europe. And since mortgage rates tend to be low, it’s clear to see why getting a mortgage in France for foreigners is such an appealing idea. Plus, French banks provide mortgages for nationals as well as foreign buyers, so you won’t necessarily have a more difficult time getting a mortgage if you’re an expat – you just may have to meet some additional criteria.

How Much Can You Borrow in France?

Typically, mortgages in France cover 70% to 80% of the property’s value. However, some brokers will only let you borrow 50% if you’re not a European Union national. The amount you can borrow also depends on how much your income is versus your expenses.

According to French law, it’s necessary that your liabilities (mortgage payments, rent payments and other expenses) don’t exceed 30% of your net household income. French banks won’t be able to offer you credit if your expenses make up more than that. That means that the amount you can borrow for your mortgage depends on the value of the property as well as your household income. Furthermore, if you’re over the age of 65 years old, earned income doesn’t count; banks only consider retirement or other types of passive income.

How Much Deposit Do You Need for a French Mortgage?

The deposit amount you’ll need will depend on how much the mortgage will cover. If the mortgage will cover 70% of the property value, you’ll need to put down a 30% deposit; if it will cover 80% of the property value, you’ll need a 20% deposit; and if it’ll only cover 50%, you’ll need to come up with that other 50% as a deposit.

French Mortgage Costs

As of March 2022, the average interest rate on new housing loans was 1.15%, according to The Banque de France. There are also a number of administrative fees you’ll be expected to pay:

Also, if you sell your property, expect to pay capital gains tax between 35% and 40%. Take this into consideration if you plan to own property in France for five years or less – that may not be enough time to offset the costs.

Mortgage Rules for Foreign Buyers

A French bank will be able to offer a mortgage in France for foreigners. However, you’ll likely have to meet certain additional requirements because of your expat status. French lenders try to mitigate risks as much as possible, especially when it comes to foreign buyers. Here are a few possibilities that you may be asked to do:

In general, lenders want to see that you have a reliable and sustainable financial situation. Being debt-free and having a savings account that you make deposits to regularly will be helpful when securing a mortgage.

Requirements and Documents for Getting a French Mortgage

In order to apply for a mortgage, you’ll need to get a significant amount of paperwork in order, including:

You can only get a French mortgage if you have a property purchase agreement, and sellers may be hesitant to move forward with you if they’re unsure of your financial situation. However, the mortgage lender may be able to give you a certificate of commitment, which is a pre-approval letter and can make it easier to negotiate with the seller. Pre-approval letters are usually valid for up to four months.

How to Apply for a Mortgage in France as a Foreigner

If you’ve ever applied for a mortgage, you’ll notice that the process of getting a French mortgage is similar to that of other countries. First, you should contact a few different lenders to determine which one will offer the best rate. There are French banks that offer mortgages to French nationals and foreigners, and there are also banks that cater specifically to expats.

You can also choose between a French bank and a mortgage broker. If you have an untraditional situation, like you’re self-employed or you’re not a European Union resident, a broker will be particularly helpful. They can do the mortgage research on your behalf and find you the best deal possible, and they can also advise you on how to best fill out the application and prepare your documents so that you have the greatest chance of approval

In order to get an official mortgage offer from a lender, the following requirements should be met:

A word about the sales agreement: It can include a clause that the purchase can end without you losing a deposit in the event that the mortgage is not approved. However, some sellers may be more hesitant to move forward if they think the sale could fall through. A pre-approval letter is helpful here to encourage them to commit.

Next, the underwriting stage will begin so that the mortgage can get final approval from the lender. When the mortgage offer is issued, there’s an 11-day cooling-off period that you have to wait out before you can sign it.

It can take up to 14 weeks for funds to be released. The property purchase is officially completed once the notary receives the funds from the lender. At that point, the final sales agreement will be signed, and the property is yours.

Mortgage Types Available in France

In France, there are three types of mortgage credits (securities against the loan): conventional, property lien and institutional guarantee. Foreign buyers will likely be offered a conventional mortgage. There are also fixed-term, interest-only, fixed-rate and variable-rate mortgages, as well as bridge loans. Let’s discuss what each one is.

Conventional

Conventional mortgages are handled by notaries, who charge about 2% of the mortgage amount for their services (completing and registering the documents for the sale of the property). Additionally, the notary will make sure that the terms of the previous mortgage have been met, as well as the terms of the new mortgage.

Property Lien

Notary services for a property lien mortgage are lower than those for a conventional mortgage – about 1% of the mortgage amount. The fees are lower because paying stamp duty isn’t a requirement. Property lien mortgages are only for old properties, and buyers cannot borrow more against the property’s value, like if they wanted to fund renovations.

Institutional Guarantee

This newer type of mortgage aims to lower how much it costs to take out a loan. The mortgage is taken out under an institutional guarantee, which is run by a group of lenders. That way, the risk is split among the lenders instead of one lender taking on 100% of the risk.

With this type of mortgage, the typical registration costs and fees don’t apply. Instead, the borrower pays a guaranteed fee that’s proportional to how much was borrowed. Transaction costs are less than 1%, and the cost of setting up the guarantee is usually no more than 2%. Plus, some borrowers will get back as much as 75% of the setup fee once the mortgage is paid.

Institutional guarantee mortgages can be taken out for old and new properties, but a good credit score and reliable income are necessary. Also, this type of mortgage is only available to French residents.

Fixed-Term

With a fixed-term mortgage, also called a capital repayment or simply “repayment” mortgage, you pay the interest and the loan over the mortgage term. Fixed-term mortgages can be anywhere from six to 30 years, and you can opt for a fixed-rate or variable-rate mortgage.

Interest-Only

With an interest-only mortgage, you pay off the interest over the term of the mortgage, and then you pay off the initial loan after that. These are less common in France than fixed-term mortgages, and the qualifying criteria is stricter than normal.

If you plan to rent out your property, consider an interest-only mortgage. You can deduct mortgage interest against your rental income, which means that your monthly mortgage payments will be reduced.

Fixed-Rate

Fixed-rate mortgages may have a higher rate, but they come with security, which some buyers prefer. The interest rate doesn’t change over time; it remains the same as it was when the mortgage was first offered.

A flexible mortgage is a type of fixed-rate mortgage, allowing the borrower to change their monthly payments while reaping the benefits of a fixed interest rate. The way this works is there are upper and lower payment limits, and payments may also be able to be suspended for up to 24 months. They can also be increased by up to 30% if you want to pay off your mortgage more quickly.

Variable-Rate

Variable-rate mortgages have interest rates that change over time. Payments can be lower than fixed-rate mortgages, but the fact that the interest rate can change makes this a riskier option. Since variable-rate mortgages look at three- to 12-month rates (and an additional margin of up to 3%), it’s difficult to know what you’ll be paying long-term. There is an option to do a type of variable-rate mortgage that has an upper payment limit, even if the rate itself can change.

Bridge Loans

A bridge loan is for a buyer who is ready to purchase their new property but is still waiting for their current property to sell. This type of loan is for the short-term, but it can sometimes be extended for as long as two years.

Speak to a Specialist

Buying property in France is a huge undertaking, and before you can live in your dream home, it is essential that you have your finances in place so that your dream doesn’t become a nightmare. HOMEHUNTS work with various specialists who are perfectly placed to advise on the options available to you when it comes to mortgages in France and other financial matters.

For more information contact one of our property consultants by calling +33 (0)970 44 66 43 who will be able to help you with your property search.

There are numerous reasons why many people want to live in Monaco, and its location is at the top of the list. Set on the glistening Mediterranean Sea with the French Alps as a backdrop, Monaco is close to both the sea and the mountains. As with many destinations on the Cote d’Azur, Monaco is […]

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There are numerous reasons why many people want to live in Monaco, and its location is at the top of the list. Set on the glistening Mediterranean Sea with the French Alps as a backdrop, Monaco is close to both the sea and the mountains. As with many destinations on the Cote d’Azur, Monaco is […]

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If you own property in France or you’re planning to buy, you’re definitely going to need a French bank account. This is true whether you’re purchasing a second home to use on holiday or you’re going to be relocating to France full-time. Either way, it’ll be difficult if not impossible to get through the buying […]

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The Cote d’Azur, once an unassuming coastline along the Mediterranean, is now one of the world’s most beautiful, vibrant and sought-after locations for buying a luxury property. Iconic towns and cities like Cannes, Nice and Saint-Tropez embody the area’s elite lifestyle with their unbeatable nightlife, designer shopping and world-renowned restaurants, not to mention stunningly beautiful […]

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The Cote d’Azur, once an unassuming coastline along the Mediterranean, is now one of the world’s most beautiful, vibrant and sought-after locations for buying a luxury property. Iconic towns and cities like Cannes, Nice and Saint-Tropez embody the area’s elite lifestyle with their unbeatable nightlife, designer shopping and world-renowned restaurants, not to mention stunningly beautiful […]

The post 5 Must-See Luxury Properties For Sale on the Côte d’Azur appeared first on Luxury Property Blog.

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Over the past few years, mortgage lenders in France have become much more comfortable with offering loans to non-residents. That means you won’t need to rely on a lender in your home country for a mortgage; you can go directly to a French lender. Whether you’ll be relocating full-time or you’re in the market for […]

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While relocating permanently can be a huge, complex decision, buying a holiday home is often a more manageable solution. If you’ve had your heart set on owning a home in France, there are plenty of locations that are easy to get to when you have free time. But where are the best places to buy […]

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While relocating permanently can be a huge, complex decision, buying a holiday home is often a more manageable solution. If you’ve had your heart set on owning a home in France, there are plenty of locations that are easy to get to when you have free time. But where are the best places to buy […]

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Catalonia, Spain, is a historic region that takes up a triangular area of the country’s northeast corner. To the north of Catalonia are Andorra and France, and the Mediterranean Sea is on the east. The Pyrenees separate the region from France, offering residents stunning views of both the sea and the mountains – similar to […]

The post 5 Stunning Luxury Villas for Sale in Catalonia, Spain

Catalonia, Spain, is a historic region that takes up a triangular area of the country’s northeast corner. To the north of Catalonia are Andorra and France, and the Mediterranean Sea is on the east. The Pyrenees separate the region from France, offering residents stunning views of both the sea and the mountains – similar to […]

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Everyone knows it’s impossible to predict the weather, but if you want the best chance of excellent, ski-worthy snowfall in France, there are a number of resorts that you can bet on. The French Alps don’t just have the best ski resorts in Europe – they’re among the best winter-weather destinations in the world. There […]

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Everyone knows it’s impossible to predict the weather, but if you want the best chance of excellent, ski-worthy snowfall in France, there are a number of resorts that you can bet on. The French Alps don’t just have the best ski resorts in Europe – they’re among the best winter-weather destinations in the world. There […]

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With plenty of hot, sunny weather, you’ll be grateful you’re so close to the sea and its many beaches when you live on the stunning Provence coast. Villages here are scenic and quaint, with interesting old towns and bustling ports, plus shops, cafes and restaurants, markets and gardens. And when you’re ready to head into […]

The post Best Places to Live on the Provence Coast

With plenty of hot, sunny weather, you’ll be grateful you’re so close to the sea and its many beaches when you live on the stunning Provence coast. Villages here are scenic and quaint, with interesting old towns and bustling ports, plus shops, cafes and restaurants, markets and gardens. And when you’re ready to head into […]

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