Bill no.1064 on the regulation of the activity of property dealers

Bill no. 1064 on the regulation of the activity of property dealers, submitted to the Public Session of the National Council and referred to the National Finance and Economy Committee on 18 October 2022, is a follow-up to the parliamentary Bill No. 252 adopted by the National Council on 10 May 2021.

PURPOSE

Bill no. 1064 aims to subject the activity of property dealers to specific conditions and constraints, with new legal obligations, as well as to recast the tax benefits (from which the property dealer can benefit) by making them conditional on the effective completion of work before the resale of the property. The aim is to maintain the principle of a favourable regime, while generating tax revenue for the State budget.

As the Monegasque legislation stands, the profession of property trader is subject to the common law regime of authorisation and administrative declaration of practice provided for by Law no 1.144 of 26 July 1991, as amended, concerning the exercise of certain economic and legal activities, or by the Ordinance of 5 March 1895 on limited companies and partnerships limited by shares, as amended.

Furthermore, the activity of property dealers benefits from an advantageous tax system with the exemption from registration duties in respect of transfer duties for valuable consideration, subject to the resale of the property acquired within a period of 4 years (without the obligation to carry out works), by virtue of Law n° 1044 of 8 July 1982 concerning the exemption from registration duties relating to operations carried out by property dealers, public sales of certain tangible movable property and contracts for works, supplies or supplies.

Bill no. 1064 intends to respond to certain concerns such as "the insufficiency of the work carried out on the goods acquired in view of the considerably higher resale prices, at the risk of blocking the market" and "certain past abuses - which may harm both this activity and the real estate sector and, more generally, the reputation of the Principality" (Explanatory Memorandum, p. 2).

SUMMARY

Bill no.1064 aims to regulate the profession of property trader autonomously in terms of:

— conditions of practice (Chapter II): filing of a declaration or administrative authorisation to practice as the case may be, financial guarantee allocated to the payment of registration duty in the event of default, civil liability insurance;

— tax (Chapter III): exemption for half of the registration fees applicable to transfers for valuable consideration, subject to compliance with four cumulative conditions, including the carrying out of work before the resale of the property within three years.

Administrative and penal sanctions (Chapter IV) are provided for in the event of failure to comply.

Finally, transitional provisions govern the conditions of application of the law as from its entry into force (Chapter V).

A Sovereign Order will determine the modalities of application of the law.