Wondering how to live in France Tax-Free? Are you an American “taxbird” living in France, constantly returning to the US every six months to avAre you an American thinking of moving to France, but worried about French taxes?  Are you an American “taxbird” living in France, constantly returning to the US every six months to avoid becoming a French tax resident? Many are drawn to the rich lifestyle of France, but worry that they will pay a heavy fiscal price for it. Let’s explore the tax considerations you need to be aware of and discuss the potential options available to you.

Don’t get caged in by French estate taxes

The US-French tax treaty offers some significant benefits for Americans to live in France, but an important pitfall lies in French inheritance taxes. These taxes can have a substantial impact on your estate planning, especially if you become a French tax resident or pass away while residing in France. The high tax rates, which can reach up to 40%, often deter many US expats from establishing French tax residency, leading them to leave their beloved life in France six months of the year. 

Set your feet down in a tax-friendly resident of Monaco

However, there is an interesting alternative to the back and forth to the United-States. More and more of our clients have found an effective solution in Monaco and its very favorable tax system. Monaco is the quintessence of the French Riviera’s glamor and wealth, and with the price of life on par with most large U.S. cities, Monaco can be a great way for Americans to stay in “France” without any additional tax burden.

A stone’s throw to a life in France

Even if Monaco isn’t technically France, the two countries are very similar culturally, even if Monaco has a slight Italian flair. As a Monaco resident, you are free to roam the surrounding region of France which is truly one of the most beautiful places you could wish to spend time. In addition, Monaco only requires you to spend 6 months a year to be considered a resident, so you are free to travel and live elsewhere for the rest of the year. Many people own an apartment in Monaco while living part of the year in France where you can own land and property just a few miles away.

Unlocking Monaco’s tax treasure trove

Monaco offers the perfect solution for Americans wishing to avoid inheritance tax, as well as many other tax benefits. 

• Capital Gains, Interest, dividend, and Investment income: Monaco does not tax any kind of personal investment income, providing local, tax-free growth.  
• Inheritance and estate tax: There is no inheritance or estate tax in Monaco levied on spouses or direct children, and very low rates for other individuals or family members. This stands in stark contrast to France, which imposes notably high inheritance taxes on French residents.

Discovering the hidden gems of living in Monaco

• Cost of living: While many focus on the glitz and glamor, you may be surprised by the real cost of life in Monaco. For example, rental prices are not much different compared to big cities, and Monaco also boasts many reasonably priced, great quality services such as a top-notch hospital, quick access to shopping in Italy or France, and great transport infrastructure. 
• Lifestyle: Monaco is located on the French Riviera with its great weather, rich international culture, and world famous events. Monaco is also considered one of the safest and cleanest places in the world.

Your flight plan to Monaco

• Visa: Everyone must start with a twelve-month, temporary visa with the option to be renewed twice. Afterward , the applicant may upgrade to a three-year, ordinary residence visa, which can be renewed as often as needed. 
• Accommodation in Monaco: It is necessary to have a deed or a lease agreement to a property in Monaco when you apply for a visa.
• Financial resources: Monaco requires that you be financially secure, and all residents must place a minimum of $1,000,000 in a Monaco bank. 

Is Monaco the right landing spot for you?

Soar to a tax-free life Monaco and financial peace of mind

Many Americans have made it their life’s dream to one day live in France, but may balk at the additional tax burden, especially on their estate and beneficiaries. If you are considering living abroad, we advocate for peace of mind by collaborating with an experienced, cross-border team to guide you through the financial, fiscal, and immigration process. Harrison Brook has done the legwork to find partners and solutions that are adapted to American expats to ensure a seamless transition overseas. Don’t hesitate to reach out to us and schedule a meeting with one of our cross-border advisers.