Monaco

Overview

Monaco is a roughly 2.1 km² sovereign city-state on the French Riviera and one of the world's best-known tax havens: it levies no personal income tax on most residents (French citizens are an exception under a bilateral treaty) and has low business taxes, alongside no annual property tax on individually owned real estate.[1] Land in Monaco is also extremely scarce — the state cannot expand except through high-rise building and land reclamation into the Mediterranean — and it has correspondingly become one of the most expensive real-estate markets on earth, with average residential prices reaching roughly €100,000 per square metre by 2018 and newer reclaimed districts pricing considerably higher still.[1][2]

Georgist writers point to Monaco as a vivid, if extreme, illustration of ATCOR and tax capitalization: abolishing taxes on income and capital does not, on its own, make a place cheap to live in. Where land is fixed in supply and highly desired, the money residents save in tax gets bid into land and property prices instead, landing as economic rent captured by whoever already owns the land — not as a lower cost of living for newcomers. Fred Harrison discusses low-tax, land-scarce jurisdictions of this kind in Boom Bust (2005) as part of his wider argument that untaxed land rent is what asset booms are made of (Ch. 9, §3).[3]

See Also

• ATCOR — the theorem this case is cited to illustrate
• Tax Capitalization — the mechanism by which the tax savings show up as land value instead
• Economic Rent — what the elevated land price represents
• Boom Bust — Fred Harrison's book discussing low-tax, land-scarce jurisdictions
• Singapore — another small, land-constrained jurisdiction often compared to Monaco in this literature

Sources

1. "Monaco," Wikipedia — used for the no-personal-income-tax status, land area, and the 2018 average real-estate price of roughly €100,000/m² (B-claim, general reference). Wikipedia
2. Monaco Life, "Monaco retains top spot as world's most expensive property market" — used for corroborating Monaco's ranking as the world's most expensive residential real-estate market in more recent years (C-claim, industry reporting). monacolife.net
3. Fred Harrison (2005), Boom Bust: House Prices, Banking and the Depression of 2010, Shepheard-Walwyn, Ch. 9, §3 — discovery source; cited for the low-tax/land-scarcity argument this page draws on (C-claim: advocacy book; specific page content not independently re-verified here). See book page.