Owning French Property as a Monaco Resident: What Happens on Inheritance?

A villa in Saint-Jean-Cap-Ferrat, an apartment in Roquebrune, or a second home overlooking the Mediterranean may sit in France while its owner lives in Monaco. This cross-border situation raises an important question: what happens to the property from a tax perspective when it passes to the next generation?

For Monaco residents owning property in France, the answer depends on several factors — nationality, domicile, the nature of the assets, and whether the transfer happens through inheritance or during the owner's lifetime. Here are the principles worth understanding before they matter.

The Treaty Applies to Nationals, Not Simply Residents

France and Monaco are connected by a bilateral convention dated 1 April 1950 dealing with inheritance taxation. Its scope is narrower than it might first appear: it applies specifically to the succession of French or Monegasque nationals. A Monaco resident holding a different nationality falls outside this particular treaty, and French domestic rules apply instead.

The treaty also uses its own definition of "domicile" rather than residence in the ordinary sense. For a French national to be considered domiciled in Monaco under the treaty, habitual residence there for at least five years is generally required. Below that threshold, the person remains, for the purposes of this treaty, domiciled in France.

French Real Estate Can Remain Taxable in France

Living in Monaco does not automatically remove French real estate from the scope of French inheritance taxation. Real property located in France is taxed there regardless of the owner's domicile — this part of the rule doesn't move.

One detail worth knowing: unlike several other treaties France has signed, the France–Monaco convention includes no mechanism to calculate French tax at the rate that would have applied to the owner's worldwide estate. In practice, this means French real estate is taxed on its own terms, without the wider estate being factored into the rate applied — a distinction that can work in an owner's favour compared with some other cross-border situations.

Donation and Inheritance Should Not Be Confused

There is another important distinction for Monaco residents: the France–Monaco convention discussed above concerns inheritance, but there is no equivalent France–Monaco convention covering donations.

Consider Monaco residents wishing to transfer French real estate to children living in Monaco. In the case of a lifetime donation, French domestic tax rules apply to the French assets concerned, independently of the inheritance treaty's provisions.

For owners of significant French property, this is worth considering well before a transfer actually takes place.

What About an SCI?

Many international owners hold French property through an SCI (Société Civile Immobilière). Whether shares in such a structure are treated the same way as the underlying real estate — or differently, as a separate category of movable asset — is not a question with one universal answer.

It depends on how the company is structured, what it holds, and how the applicable rules classify that particular type of shareholding. Two SCIs that look similar on paper can, in principle, be treated differently depending on these details. This is exactly the kind of question that benefits from being asked at the time a structure is set up, rather than assumed either way.

A Simple Example

Consider a Monaco resident who owns a villa in Saint-Jean-Cap-Ferrat, an apartment in Monaco, financial investments, and shares in an SCI holding another French property.

The villa itself remains within the scope of French inheritance taxation regardless of where its owner lives. The SCI shares raise a separate question that depends on the structure's specifics. And the owner's nationality, together with how long they've lived in Monaco, determines which set of rules applies to the rest of the estate.

For a substantial cross-border estate, the useful question is therefore not simply "Where do I live?" — but rather "Where are my assets, how are they held, and which rules apply to each of them?"

Why This Matters When Buying Property

Inheritance planning is understandably rarely the first consideration when someone finds the right villa on the French Riviera. But for international buyers acquiring significant assets in France, the ownership structure chosen at acquisition can have consequences many years later.

Before purchasing a substantial French property, it can be sensible to consider not only the property itself, but how it should be owned, how it fits within the buyer's wider international estate, and how it may eventually be transferred to the next generation. For Monaco residents buying on the French Riviera, this cross-border dimension is particularly relevant.