Before getting to Monaco I was really curious what it would be like. Could it possibly be as glamorous as I had heard? Furthermore how much would things cost and why was it so expensive. Well after doing my research and then seeing it in person on arrival, the answer to all these questions became abundantly clear: taxes. Well, more specifically no taxes.
As you see, the principal reason Monaco is so expensive is because it is the best-known tax shelter in the world (even though other countries such as Andorra, St. Kitts and Nieves, and Belize offer similar tax incentives). As the website NoMoreTax actually writes, “In Monaco, taxes are still as good as non-existent (unless you’re a resident of Monaco with the French nationality). Real estate in the Principality of Monaco is very expensive but you can always rent a small studio in Monaco where you ‘officially’ reside and simultaneously rent something roomier and more spacious in Nice or just across the border in Italy for example (in a discreet way to avoid trouble with the local tax authorities of these countries). Monaco is packed with celebrities who enjoy the pleasant (fiscal) climate, such as former James Bond – Roger Moore, Lewis Hamilton, Jenson Button, Novak Djokovic, Caroline Wozniacki, Andrea Bocelli, Roger Moore, etc.”
So the reason it holds the title of most expensive city in the world (in terms of real estate), is very simple. To claim residence in Monaco and live there over half the year allows you to avoid income tax. For residences of tax-heavy countries (and the ultra-rich across theworld) this seems like a small shoreline from heaven. In places like Italy for example, an earner of $400,000
annual salary will only take home $202,360. And in Denmark everyone earning over $60,000 is taxed at a rate of 60%. These rates make even the heaviest US tax schemes look tame and have convinced the wealthy from all around Europe to splurge on securing real estate within the borders of this Principality.
Thus walking the streets you can hear a plethora of languages being spoken as it is clear that it really is an international location. With a distinctly different vibe than French Riviera towns like Nice and Cannes, Monaco has brought people in from around the world and created something unique. Kind of like a .78 square mile country club (the landmass of Monaco). And while you will most likely realize that it lacks some of the charming qualities that make the French Riviera as lovely as it is, that non-existent tax form will surely keep you coming back for more. Well at least for a minimum of 183 days each year. 😉
– Robert Yeagle