Gracious Living, Zero Taxes

Any mention of Monaco probably conjures up glamorous casinos and streets lined with luxury shops. But there is more to see, as I found out on a recent trip to the world's second smallest country.

For starters, Monaco has the same kind of street-side cafes you find in France, there are three sand beaches to choose from (though two of them charge visitors a fee), and, if you long for a moment of quiet reflection, you can retreat into the ruling family's Japanese Garden. (http://www.visitmonaco.com)

Despite only being 1.2 square miles in size, the 700-year-old principality offers just about any amenity you might want. Besides, the Cote d'Azur's other attractions are all nearby. We went to gorgeous St. Jean Cap Ferrat one day, which is only a 20-minutes drive away. The nine-mile walk around the Cap Ferrat peninsula takes about three hours and is one of the most scenic I've experienced. Bring good walking shoes, since parts of the footpath are hewn into solid rock! (http://la-cote-dazur.com/stjeancapferrat/ )

Monaco currently has some 32,000 residents, of which 80% are foreigners. Property prices are on par with London and Paris:

- A 19-square-meter (204 square feet) studio in an old building near the port is on offer at Euro 245,000 ($312,000).

- Fontevieille is Monaco's newest borough, built in the 1970s on land reclaimed from the sea. A two-room apartment with sea-view, 55 square meters (588 square feet) of inside space, and 20 square meters (214 square feet) of loggias, a cellar, and a parking space is for sale at Euro 1.08 million ($1.37 million).

- If money is no object, Euro 6.5 million ($8.28 million) buys you a 190-square-meter (2,033-square-foot) apartment with six rooms and a 71-square-meter (760-square-foot) terrace. Two cellars and two parking spaces are thrown in, and the apartment is located in the most sought-after part of town, near the Casino's Golden Square.

You can find these and more listings at http://www.afim.mc/en/index.html.

Residents of Monaco clearly view the sky-high prices as a bargain once they take their tax savings into consideration. (The principality scrapped its income tax in 1870, and not only is the personal income tax 0%, but you don't even have to keep account records.) Monaco's zero tax regime is set in stone and prices are therefore likely to continue to rise. There is, however, a little-known way to invest into Monaco property at a substantial discount, and anyone with a few thousand dollars to spare can profit from Monaco's booming real estate market. We'll reveal more on this in International Living's December print issue, available now for subscribers.

Americans interested in getting residency can check the website of Monaco's Consulate General in New York: http://www.monaco-consulate.com.