With a limited building area, the price of real estate in Monaco is notoriously high, even the highest in the world. Accommodation in Monaco can therefore be difficult for some tenants with modest incomes whether they are Monegasques or of other nationalities.

For this reason, and in order to continue to play its social role, the State has set up housing aid measures to prevent the rent burden from becoming too heavy. Under certain conditions, these tenants can benefit either from the “National Housing Aid” (NHA) for nationals or from the “Differential Rent Allowance” (DRA) for others.

These measures are dealt by the Housing Department, to which an application for an allowance must be submitted, accompanied by all the relevant documents relating to the composition of the household, resources and the rental of the accommodation.

1. National Housing Aid

1. Principle and et conditions

NHA is an allowance instituted in favour of persons of Monegasque nationality, who have a regular income and holding a lease with residential use registered with the Monaco Department of Tax Services, regardless of the housing sector. This lease must imperatively be granted in the name of the person applying for this allowance. The terms and conditions for the allocation of the NHA are specified by Ministerial Decree no. 2017-743 of 11/10/2017 pertaining to National Housing Aid.

The NHA is paid before the anticipated calendar quarter and on the basis of income, rent and satisfaction of normal household needs, and cannot be combined with any other aid or housing allowance received per household.

The normal needs of the household are determined as follows, according to the number of persons usually living there, to which is attached an upper limit rent, published each year in the "Journal de Monaco" (the last publication dates from Ocotber 27th, 2023 and is still valid for the year 2024):

Chart: normal needs and reference rent

Occupancy cost must represent at least 20% of the household income, with the exception of persons over 65 years old, for whom the ratio is reduced to 10%.

It is specified that the percentage of 10% is extended to the income of a spouse under 65 years old only if the spouse is retired. Otherwise, and for any other person living in the household, 20% of his or her income will be taken into account.

The amount of the NHA is equal to the difference between the occupancy cost requested and the amount of rent actually paid. If the amount of the rent is less than the rent cap, the latter may be increased by 20% (within the limit of the cap) to take into account the rental charges on a flat-rate basis.

Where the normal need is not met, a coefficient is then applied, corresponding to two thirds of the effective rent excluding charges when this amount does not exceed the NHL ceiling.

In all cases, the allowance may not exceed 60% of the rent taken into account (or the rent ceiling if this is higher), except for persons over 65 years of age (in this case, there is no limit and the amount is considered on a case-by-case basis depending on the applicant's situation). Finally, in order to qualify for the NHA, the occupancy cost (including charges) paid by the applicant must not exceed 35% of his/her income (excluding the NHA loan, the terms and conditions of which will be set out below), increased to 40% if there is no loan application.

At the end of last year, new provisions were put in place for new rentals related to the non-regulated housing sector (not including those under Law no 887 of 25/06/1970), only for 2-room and 3-room apartments (Ministerial decree n°2019-1057 of 13/12/2019).

From January 1st, 2020 to December 31st, 2022, the cap rate is increased to 80% if the 60% rate initially taken into account would result in an effort rate greater than 35% (increased to 40% in the event of a loan application).

2. Advance of costs loan

Another aspect of these measures is to allow people likely to receive the NHA, and if their situation justifies it, to apply for a loan at interest rate 0 refundable over 4 years, provided that this does not result in an occupancy cost rate higher than 40% of their income.

The aim is to advance certain costs inherent to entering the premises, such as the security deposit.

Two types of loans are considered:

- the amount of the loan is added to the amount of the effective occupancy cost;

- except for the non-regulated sector, for the 1 or 2-bedroom apartment, for which the loan is refundable at the exit, which has no impact on the rate.

However, for those receiving benefits from the non-regulated housing sector, the agency fees will be paid by the State (once per household, per type of apartment) and the security deposit may be deducted from the NHA or refunded in a single payment at the end of the lease.

For people over 65 years old, if the examination of their situation justifies it, the agency commission can be paid by the State for a first time request, regardless the housing sector.

This loan is not systematically granted and must be the subject of a possible request before any commitment or signature of a rental lease. It is therefore advisable to contact the Housing Department, which will study the file beforehand.

In all cases, the loan must be requested no later than one month after the effective date of the lease. Once granted, the conditions will be stipulated in an acknowledgment of debt and its reimbursement will be deducted from the NHA. At the end of the lease, the remaining sums due must be refunded in full.

*The occupancy cost rate is equal to the effective rent plus effective charges less the amount of the NHA, divided by the monthly income.

2. Differential Rent Allowance

1. Principle and conditions

The DRA is an allowance granted to persons who are not Monegasque nationals, residing in Monaco and occupying personally and effectively as tenants, a dwelling there.

However, in order to be eligible for the DRA, such persons must meet the following conditions:

- reside in an apartment subject to Law No 1.235 of December 28^th, 2000 relating to the conditions for renting certain premises for residential use built or completed before September 1^st, 1947;

- not have in Monaco or within a radius of 15 kilometers, as owner or usufructuary, premises for residential use corresponding to their normal needs and which they could legally occupy.

The DRA is paid once the calendar quarter has expired and awarded on the basis of (1) the amount of income, (2) rent and (3) the satisfaction of the household's normal needs, and cannot be combined with any other aid or housing allowance received per household :

1. Amount of income 

The income taken into account is the one earned by the applicant and, when applicable, of the persons usually living in the household during the 12-month period preceding the 1st day of the month in which the application is made. The household income must not exceed the amounts fixed by Ordinance n°14.712 of 28/12/2000 (see table below);

2. Amount of rent

The amount of rent taken into account is subjected to a rent cap, which the criteria are published each year in the "Journal de Monaco". The DRA may not exceed 50% of the amount of these rents;

3. The normal needs of the household

They are determined by Article 4 of the aforementioned Ordinance, depending on the composition of the household :

Chart : normal needs and capped rent

However, persons whose housing exceed the normal need can benefit as well from a DRA calculated on the basis of their monthly rent proportionally reduced to the number of rooms meeting their normal housing need. In this case, the rent taken into account as the basis for calculating the DRA may not exceed the reference rent for the type of dwelling that satisfies the normal housing needs.

Article 6 of the Ordinance lays down the method for calculating the amount of the DRA, which is equal to the difference between :

• On one hand, the monthly capped rent detailed above or the current rent, if this amount is lower than the said capped rent,
• on the other hand, 20% of one-twelfth of the annual income earned by the household, a percentage which is reduced to 10% for persons over 65 years old. 

In any case, the DRA cannot exceed 50% of the rent taken into account for its calculation. However, the beneficiary's personal contribution may not exceed 20% of his or her household income, provided that the DRA is calculated on the basis of a dwelling corresponding to his or her normal needs with a rent below the related capped rent.

2. Advance fee loan

Like the beneficiaries of the NHA, those likely to receive a DRA may, if the examination of their situation justifies it, benefit from a loan intended to ease their entry into the premises by allowing the advance of the costs relating to the security deposit and, if applicable, the agency fees. This advance shall be paid directly to the owner and, under no circumstances, to the tenant.

The loan is not systematically granted and must be the subject of a possible request before any commitment or signature of a rental lease.

Once granted, the amount, lent at a rate of 1% per year, is calculated on the basis of the rent approved for the dwelling corresponding to the normal needs of the household and within the limit of the capped rent corresponding to the normal needs of the household as stated above. It is reimbursable in 3 years by being deducted from the DRA granted to the beneficiary of the loan.  Once granted, the conditions will be stipulated in an acknowledgment of debt

3. Conclusion

A generous help continuously evolving over time

Indeed, the last report published by the IMSEE in 2020 showed that many households received housing benefits, namely 947 beneficiaries for the NHA, regardless of the housing sector, with an average amount of €809 per month, and 340 beneficiaries for the DRA with an average monthly amount of €553.

Whether for the NHA or the DRA, the amounts may change in the event of a change in the beneficiary's family, financial or housing circumstances. This is why it is mandatory to declare the amount of income collected each year to confirm that the conditions for the allowance are still fulfilled. In the event of a false declaration or any other failure to declare, this benefit may be suspended and the sums paid without entitlement will be immediately due.

The Valeri Agency team is at your disposal to help you find the accommodation that suits your needs and, if necessary, to assist you to prepare your application for housing benefit.

This article has been written for information purposes and should in any way be used as a reference for the calculation of housing aid, only the Housing Department being able to give the exact amount of aid granted on the basis of the documents provided by the applicant.