France–Monaco — Tax Treaty

1The 1963 and 1950 conventions, and why your passport matters more than your address

Monaco levies no personal income tax on its residents. The French response is organised by the tax convention of 18 May 1963 and by the succession convention of 1 April 1950 — one of the few succession treaties France has concluded. Together they divide the questions: for income and wealth taxes the deciding question is who the owner is; for succession duty, what is owned, and through what.

Article 7 of the 1963 convention is the rule that makes this relationship unlike every other in this collection. In substance: a person of French nationality who moves their domicile or residence to Monaco — or who cannot show five years of habitual residence there by 13 October 1962 — is taxed in France on worldwide income exactly as if they had never left. They file with the Service des impôts des particuliers de Menton (CGI annexe IV, art. 121 Z quinquies), and a dual national is treated as French (RM Bachelet, JOAN 1988). Because French residence continues for tax purposes, moving to Monaco does not by itself trigger the exit tax of article 167 bis. The exchange of letters of 26 May 2003 carves out narrow exceptions — principally certain spouses and surviving spouses of Monégasques, and Monaco-born minors — each with continuity conditions that are examined on the file, never presumed.

For every other nationality, the 1963 convention changes less than its name suggests. It is not an income-tax treaty on the OECD model: it divides no income between the two states and shelters nothing. A Hong Kong, British or Italian national living in Monaco therefore faces France as an ordinary non-resident, taxed on French-source income and French property under French domestic law — the sections below say what that costs.

Movement between the two jurisdictions rewards early planning in either direction. Leaving France is, for a non-French national, a genuine tax departure to which the exit tax of article 167 bis can apply. Moving from Monaco into France brings ordinary French residence with worldwide reach — softened by one statutory window: a person who becomes French-domiciled after five years abroad is taxed for their first five years on French assets only (article 964, 1°, al. 2). The timing of that second move, against gifts already made and structures already created, is among the most consequential calendar decisions this relationship presents.

Sources considered: 1963 convention, arts. 1 and 7 (as amended by the avenant of 26 May 2003), with the 2003 exchange of letters; CGI (the French tax code) arts. 167 bis, 964, annexe IV art. 121 Z quinquies; RM Bachelet, JOAN 1988; BOI-INT-CVB-MCO-10; BOI-IR-DOMIC-20. Scope note: the treaty text prevails over the older commentary, and every date here is re-checked at each edition.

Reviewed as at 9 August 2026 · 1963 convention arts. 1, 7; 2003 exchange of letters; CGI arts. 167 bis, 964

2What you pay to buy a property in France, and what it costs you every year

The purchase follows the standard French sequence: your offer; then the pre-sales contract (compromis de vente), with its ten-day cooling-off period and a deposit of usually 10%; then the conditions precedent. Last comes the deed itself (acte authentique), signed before the notaire, who collects the duties and registers your title. The notaire is a public officer. The law obliges him to advise both parties on the deed he draws up — what it covers, what it commits each side to, what its risks are. His duty stops at the deed: the planning around it (tax, structure, transmission) belongs to your own advisers, and for a Monaco buyer that planning is best settled before the pre-sales contract, because the acquiring vehicle is hard to change once the process is under way.

Worked example — the median Near-Monaco villa (€4.7M, the 2014–2025 DVF median of the arc adjoining the Principality):

These figures follow the published scales and are given for orientation; the notaire itemises the duties and fees on your actual deed. A new-build VAT regime, furniture excluded from the price, or a mortgage will change the arithmetic. The annual local property tax (taxe foncière) is set commune by commune, and communes in designated high-demand areas (zone tendue) — a category that includes the marquee Riviera communes — may vote a surcharge (surtaxe) on second homes; our agency re-checks those rates at each edition rather than freezing them.

The wealth tax, and whose wealth it reaches

Article 964 of the tax code charges an annual tax on real-estate wealth above €1,300,000. For an owner not domiciled in France, it reaches French property and the property share of any company's shares (article 965, 2°) — an SCI changes the paperwork, not the exposure. Monaco levies no wealth tax, so the French charge is one-sided rather than doubled, and nothing offsets it.

For French nationals the reach is wider. Article 7 ¶3 of the 1963 convention, inserted by the avenant of 26 May 2003, taxes a French national who moved their domicile to Monaco on or after 1 January 1989 on wealth as a French resident — worldwide taxable assets, not just the French property — and it did so with effect from 1 January 2002. A French national who settled in Monaco before 1989 stays outside that rule.

The statute holds one planning window worth naming: a person who becomes French-domiciled after five years abroad is taxed for their first five French years on French assets only (article 964, 1°, al. 2) — of direct relevance to the Monaco resident contemplating a later move across the border.

Borrowing against the French property cuts French wealth tax, and Monaco asks nothing back

The financing commonly proposed in the Principality pairs the purchase with a loan from the buyer's own bank, secured on a pledged portfolio: the liquidity stays invested while the debt reduces the taxable base. The mechanics are lawful, and the code anticipates them. Bank acquisition debt is deductible from the IFI base (article 974), and financial assets sit outside that base entirely. Three limits apply. An interest-only loan, with the capital repaid at the end, is treated as if you were repaying it in equal yearly steps, so the deductible amount shrinks year by year — and by one twentieth a year where no term is fixed. Where your French property exceeds €5M and the debt exceeds 60% of its value, only half of the excess is deductible, unless you show the loan was not taken mainly for tax. And the debt must be real: actually drawn, actually serviced, at market terms. If instead the money is lent to a French property-holding company (an SCI) through its shareholder account, the debt no longer reduces the taxable value of the shares (article 973).

On a €15M purchase financed in full, €9M deducts in the first year, the remaining €6M counts as €3M, and the repayment the law assumes then erodes the balance annually. Leverage moderates the wealth tax in its early years and fades by design — a calendar best examined before the pre-sales contract, with the lender and the French tax lawyer together, because a facility agreed on its own terms can be the wrong facility for the wealth-tax base.

Three filings fall due every year, and two of them need a value you declare yourself

None of these depends on either convention. They fall on the owner of French property whatever their residence, and they are the part a Monaco owner most often discovers late.

Our agency prepares a free valuation for owners at valuation.elenaagueeva.com. An agent contacts you within 48 hours to arrange a visit.

It rests on the same official records a French property valuer (expert immobilier) works from: the government's register of recorded sale prices, the cadastre, and the planning permits granted on the parcel. The agent then visits to appraise the view, the garden, and the quality of the construction and the finishes. The valuation report (avis de valeur) is produced within 48 hours of the visit.

The same figure carries your French filings. Wealth tax, the 3% company tax and gift duty are all declared at the property's market value. The law takes that value from your own detailed estimate (articles 761 and 973 of the tax code), and asks no particular valuer to produce it. A court-appointed expert (expert judiciaire) belongs to litigation, not to a declaration. If the administration challenges your figure, a dated, written valuation resting on comparable sales is what supports it.

The first valuation of a property is free for its owner or seller. A repeat valuation of the same property, or one commissioned by a family office, a bank or another adviser for a client, is a billable engagement — ask us for terms.

Sources considered: CGI arts. 964 (incl. 1°, al. 2), 965, 973–974, 990 D–990 F, 1418; 1963 convention art. 7 ¶3 (avenant of 26 May 2003). Scope note: costs follow the published scales and are itemised on your deed; communal rates are re-checked at each edition. Monaco levies no wealth tax, so the French base stands alone.

Reviewed as at 9 August 2026 · CGI arts. 964–965, 973–974; 1963 convention art. 7 ¶3

3Five ways to own a French property, and what follows from each

These are questions to work through with your advisers, not recommendations. One fact governs all of them, and it is specific to this relationship: the wealth tax, the capital-gains regime and succession duty do not read a holding vehicle the same way. A structure chosen for the sale can be the wrong one for the transmission, which is why the analysis belongs before the pre-sales contract.

Giving your children the ownership now, and keeping the use for life (démembrement)

The structure most often proposed alongside the loan divides ownership itself. You keep the right to use the property and take its income for life (the usufruit), and your children take the ownership now (the nue-propriété). The tax code values that split by your age: under article 669, bare ownership is worth 60% of the full value when you are between 61 and 70, and 70% between 71 and 80. The gift is taxed on that fraction alone, at today's value, and when you die the two halves rejoin with no further tax. Article 751 sets the conditions — a notarised gift, made more than three months before death, valued on the article 669 scale — and article 968 keeps the property's full value in your own IFI base, so your wealth tax does not move.

For this relationship the interest is specific. The gift falls outside the 1950 convention in any event, so the démembrement accepts a known French charge today in exchange for certainty at death. On a €10M property whose owner gives the bare ownership at 65, duty is assessed on €6M, after the €100,000 per-child allowance and on the article 777 scale; nothing further falls due at death, and the appreciation between gift and death accrues to the children untaxed. The age scale runs against delay, so the arithmetic rewards a decision taken at acquisition. What the gift does to your children's reserved share belongs with your notaire and the family's counsel.

What an ownership structure changes, beyond tax

An ownership structure answers seven questions. Tax is one of them, and rarely the one that matters most.

Sources considered: CGI arts. 669, 751, 777, 779, 968, 973–974, 990 D, 990 J, 1649 AB; 1950 convention art. 1er (gifts excluded). Scope note: structures are presented as questions for analysis, not recommendations; the forced-heirship consequences of any gift belong with the family’s counsel.

Reviewed as at 9 August 2026 · CGI arts. 669, 751, 968; 1950 convention art. 1er

4What you pay when you sell

France taxes the gain, because the property is in France — but under which regime depends on your passport, and the Conseil d'État confirmed the split at the highest level on 21 June 2021 (n° 439354). A French national within article 7 sells under the resident regime of article 150 U. A Monaco resident of any other nationality sells under article 244 bis A, the non-resident levy on French property and property-rich shares. Both regimes share the ownership-duration allowances: the income-tax charge extinguishes after 22 years of ownership, and the social levies after 30.

The social levies turn on a different question again: not nationality, not address, but which social-security system you belong to. The reduced rate belongs to sellers inside the European coordination; affiliation is a question of fact, settled on the file when our agency takes it.

The representative you must appoint

Monaco sits outside the EU and the EEA, so a seller resident in Monaco appoints a representative accredited by the French tax administration, who is answerable for the filing and the payment (article 244 bis A, IV). Two automatic exemptions exist: sales at €150,000 or less per seller, and sales fully exempt because the property has been owned thirty years. Where a representative is needed, the notaire handling the deed normally arranges it.

Where the property is held through a company, the choice between selling the property and selling the shares changes who will buy it and what you file, and it is best evaluated before marketing begins rather than in the course of negotiation.

If you leave France after selling: the exit tax

France's exit tax is narrower than its name suggests, and for most of this brief's readers it never engages: a French national within article 7 remains a French tax resident in Monaco, so the move itself is not a departure. For a non-French owner leaving France, article 167 bis aims at shares, not property: it applies to people who were French-domiciled for at least six of the ten years before leaving, and taxes the unrealised gain on shareholdings worth more than €800,000, or on stakes of 50% or more of a company's profits. A property you have already sold has paid its own tax, and the sale proceeds are outside the charge. Shares in a family SCI are treated like the property itself rather than like a share portfolio: as long as the company keeps the ordinary income-tax regime, the gain on those shares stays inside article 150 UB and outside the exit tax. A company that has opted for corporation tax changes that answer, so the option belongs on the pre-departure checklist. Where the exit tax does apply, payment is normally deferred, and the assessment lapses after two years — five if the portfolio exceeded €2.57M — or when you return to France.

Sources considered: CE, 21 June 2021, n° 439354; CGI arts. 150 U, 150 UB, 167 bis, 244 bis A (incl. IV); BOI-RFPI-PVINR. Scope note: the allowances follow the statutory scales, and your actual base is itemised on the deed — works and purchase costs included.

Reviewed as at 9 August 2026 · CE n° 439354; CGI arts. 150 U, 244 bis A, 167 bis

5Renting before you buy, and renting your property out

Renting before you buy

A year's rental before buying is the usual first step, and for a non-French Monaco resident it carries one caution worth stating plainly. French tax residence under article 4 B of the tax code depends on where your household is, where you mainly stay, and where your professional and economic interests sit — and none of that defers to a Monaco lease. A Riviera property that becomes the family's real home can make you French-resident, taxable in France on worldwide income, well before you buy anything. For a French national within article 7 the question does not arise: France already treats them as resident. The choice between a furnished seasonal rental and a one-to-three-year unfurnished lease (bail civil) also changes how easily you can leave.

Renting your property out

France taxes the rental income of non-residents, furnished rentals included, at a minimum of 20% up to the second bracket and 30% above it (article 197 A of the tax code), unless you can show a lower worldwide effective rate. Social levies apply on top, at a rate that follows your social-security affiliation — the recurring France–Monaco question of fact. A French national within article 7 declares the rent inside their ordinary French return, as a resident.

Sources considered: CGI arts. 4 B, 197 A. Scope note: the treatment turns on the form of exploitation and on affiliation, both questions of fact.

Reviewed as at 9 August 2026 · CGI arts. 4 B, 197 A

6What happens to the property when you die, or give it away

Death and gift follow different sources here, and estate planning is built on that difference. A transmission at death runs inside the 1950 convention — one of the few succession treaties France has concluded. A gift during your lifetime runs outside any treaty at all: article 1er of the 1950 convention says in terms that gift duties are not covered, so French domestic law applies alone.

At death: what the 1950 convention gives each state, and for whose estates

The convention decides which state taxes which kind of asset, for the estates of French and Monégasque nationals — the articles that divide the estate speak of the nationals of the two states, and for a French national a Monaco domicile at death counts only after five years of habitual residence there (article 1er). For a Monaco resident of another nationality, French domestic law reaches the French property anyway (article 750 ter of the tax code).

Where French duty applies, the scale is that of article 777: rising to 45% in the direct line above €1.8M per child, after the €100,000 allowance per child of article 779; siblings at 35% and 45%, unrelated takers at 60%; the surviving spouse exempt. Before France computes anything, the civil law decides who inherits: the matrimonial regime, the choice of law under EU Regulation 650/2012, Monaco's position outside that Regulation, and French forced heirship are questions for the family's counsel as much as its tax adviser.

The planning consequence, stated plainly

For a Monaco-domiciled owner, the choice between direct ownership and an SCI may relocate the succession taxing right — yet the same SCI gives no shelter from the wealth tax, and a lifetime gift of its shares returns the matter to French law, because the convention does not cover gifts. No single structure is best for all three taxes. Run the death-time and lifetime analyses separately, because they are governed by different sources; treat the choice between them as a real choice with different mechanics, not a question of timing; and check any structure against the route it was not designed for.

Sources considered: 1950 convention arts. 1er, 2, 6; exchange of letters of 16 July 1979; RM Ehrmann, JOAN 30 December 1991; CGI arts. 750 ter, 777, 779, 784 A; Code civil art. 913 al. 3; EU Regulation 650/2012; BOI-INT-CVB-MCO-30. Scope note: the absence of gift coverage is stated from article 1er's own words; Monégasque domestic law is stated for orientation and belongs with your advisers there.

Reviewed as at 9 August 2026 · 1950 convention arts. 1er, 2, 6; CGI arts. 750 ter, 777, 779

7The eight questions Monaco owners ask most

Can a French national avoid French income tax by moving to Monaco?

No. Article 7 of the 1963 convention taxes a French national who moves their domicile to Monaco on worldwide income, as if resident in France, from the year of the move; a dual national is treated as French. The 2003 carve-outs are narrow — certain spouses and surviving spouses of Monégasques, and Monaco-born minors — each with continuity conditions.

Does a Monaco resident pay French wealth tax on a Riviera property?

Yes, once French real-estate assets exceed €1.3M, held directly or through the property share of company shares (article 964 of the tax code). For a French national who moved to Monaco on or after 1 January 1989, article 7 ¶3 goes further: the wealth tax applies as it would to a French resident.

Which country taxes the inheritance of a French property?

France. The 1950 succession convention gives the property to the state where it sits, wherever the deceased was domiciled. What the convention can move is the treatment of shares — not of the property itself.

Does an SCI avoid French succession duty for a Monaco resident?

It has historically moved the taxing right on the shares to Monaco for a Monaco-domiciled deceased (RM Ehrmann, 1991). But attribution-type companies are treated as the property itself under the 1979 exchange of letters; the convention does not cover a lifetime gift of the shares; and the wealth tax is the same whatever the holding structure. Each of the three taxes follows its own rules.

How is a Monaco resident taxed when selling a French property?

French nationals within article 7 sell as residents under article 150 U — the Conseil d'État confirmed it on 21 June 2021. Every other Monaco resident sells under the non-resident levy of article 244 bis A. Both keep the duration allowances: income tax gone after 22 years, social levies after 30.

Is rental income from France taxed if the owner lives in Monaco?

Yes. A non-French owner pays at least 20%, then 30% (article 197 A), plus social levies at the rate their social-security affiliation commands. A French national within article 7 declares the rent as a French resident.

Does a French exit tax apply after selling and leaving?

Rarely, and never on the property itself. For a French national within article 7 the move to Monaco is not a tax departure at all. For others, article 167 bis reaches only people French-domiciled six of the ten years before leaving, and only their unrealised gains on shares above €800,000 or on stakes of 50% or more. The property you sold and its proceeds are outside it.

Does a bank loan reduce French wealth tax on a Riviera property?

Yes. Bank acquisition debt is deductible from the IFI base (article 974), and pledged financial assets sit outside the tax altogether. The deduction is bounded — interest-only loans are treated as amortising year by year, and above €5M of property and 60% debt, half the excess is disallowed unless a mainly non-tax purpose is shown — so leverage moderates the tax early and fades by design.

Sources considered: 1963 convention art. 7; 1950 convention arts. 1er, 2, 6; CGI arts. 150 U, 167 bis, 197 A, 244 bis A, 750 ter, 964, 974; CE n° 439354. Scope note: these answers condense the sections above and inherit their scope notes.

Reviewed as at 9 August 2026

8The court decisions, the sources and the sales figures

Which regime a French national sells under — CE n° 439354

The Conseil d'État ruled on 21 June 2021 that a French national within article 7 of the 1963 convention sells French property under the resident capital-gains regime of article 150 U, not under the non-resident levy of article 244 bis A. The decision settles the practical question this brief turns on in section 4: which regime, for whom. Both regimes share the duration allowances, so for long-held property the difference is mechanical rather than financial — but the filings, the representative requirement and the levies differ, and the seller needs to know which track they are on before the deed.

CE, 21 June 2021, n° 439354 — full decision read. Scope note: the decision construes article 7 of the 1963 convention together with CGI arts. 150 U and 244 bis A; it does not touch the succession convention.

What changed, and what our agency is watching

Edition 2 — the position in August 2026. The instruments as they stand: the convention of 18 May 1963 as amended (avenants of 25 June 1969 and 26 May 2003, the latter inserting the wealth-tax rule of article 7 ¶3, together with the exchanges of letters from 1963 to 2005), and the succession convention of 1 April 1950 with the exchange of letters of 16 July 1979. The BEPS multilateral instrument applies to the 1963 convention — for France from 1 January 2019, for Monaco from 1 May 2019.

The sales figures behind this brief

Seen from the Principality, the Riviera's €3M+ villa market is a proximity arc and two established trophy markets further west. Within twenty minutes of Monaco, 536 villa sales of €3M and above cleared €5.1 billion over the twelve DVF years.

Source: DVF (« Demandes de Valeurs Foncières », DGFiP), villa sales ≥ €3M, 2014–2025, duplicate estate records removed — the same method as the published Riviera Intelligence pages. Register complete to 31 December 2025. The Near-Monaco arc: Roquebrune-Cap-Martin, Èze, Beaulieu, Cap-d’Ail, Villefranche and Beausoleil.

Where the owners live, in aggregate. The figures below count owners, they do not identify them. They are totals, never single sales, and they come from the French government's own record of property transactions and from the public company registers — both already public. No owner is named anywhere in this brief. Across 20 Riviera communes, 34% of the ownership positions studied are held from outside France — and Monaco is by a wide margin the largest foreign residence, accounting for 34% of those foreign-held positions, led by Saint-Jean-Cap-Ferrat, the Cannes hills and the Roquebrune corniche. 58% of all positions are held through a company, and among corporate holdings the SCI accounts for 39% — which is why section 3 matters here more than anywhere else on this coast.

Aggregates only, drawn from public sources under their re-use conditions; no individual holding is identified or published. Residence follows the address on the register. These figures are refreshed at each edition.

How this brief was checked, and its limits

Every statement of law is checked against the Chiron Legal Corpus — the research library maintained by our offshore legal-research partner — and re-checked against the official sources at each edition. The review of 9 August 2026 covered four sources.

• Légifrance — CGI arts. 4 B, 150 U, 150 UB, 167 bis, 197 A, 244 bis A, 669, 750 ter, 751, 777, 779, 784 A, 964–965, 968, 973–974, 990 D–990 F, 1418, annexe IV art. 121 Z quinquies; Code civil art. 913.
• The two conventions as published — the 1963 convention consolidated with its avenants and exchanges of letters, and the 1950 succession convention with the exchange of letters of 16 July 1979 — both read in the raw text.
• The tax authority's commentary — BOI-INT-CVB-MCO-10 and -30, BOI-IR-DOMIC-20, BOI-RFPI-PVINR.
• Conseil d'État n° 439354 (21 June 2021), read in full.

Both conventions were concluded in French alone, so the single authentic text is the text read — there is no second-language version to check it against. Items that depend on the file — communal rates, social-levy affiliation, the current standing of RM Ehrmann — are stated at mechanism level and verified case by case. Market data: DVF (DGFiP), villa sales ≥ €3M, duplicate estate records removed, register complete to 31 December 2025.

This brief sets out published law and public transaction data. It is research, not advice on your own situation: your nationality, the date you settled in Monaco, your matrimonial regime and your chain of title all change the answer. For an actual purchase or sale, our agency brings in the French tax lawyer and the notaire you need, and handles the sale or purchase itself.

Reviewed as at 9 August 2026 · full decision read; DVF register, duplicate estate records removed

Further intelligence

The Riviera villa market — the coast-wide €3M+ index

Riviera property tax & relocation — the incoming buyer's primer

France–UK — the convention pair