2026 French Budget – How it Affects You

After months of delays, disorder, and political deadlock, France’s PM Sébastien Lecornu pushed the 2026 French Budget through the National Assembly. Here’s what we know so far from our Tax Expert and Relocation Advisor, Debby Nye:

Principal Changes for Individuals

The personal income tax bands on the progressive scale have increased by 0.9% in line with inflation on 2025 income

Retirees will still get the 10% tax-free allowance on 2025 pension income (capped at 4439€ per household) 

The level of social taxes (prélèvements sociaux) has increased by 1.4% from 17.2% to 18.6%.
However, it is the general social contribution known as ‘CSG’ that has increased by 1.4% within the overall rate of social taxes, meaning that those only paying the solidarity tax of 7.5% will not be affected by this increase.

As a reminder, social taxes apply to asset income, namely investment income and rental income from property. The solidarity tax, however, is only applicable to taxpayers who hold an S1 bilateral social security certificate and are not subject to compulsory French health insurance through a professional activity in France, as well as to non-resident, non-professional landlords who are affiliated with the NHS or with a national health system in another EU country.

The modest income subsidy known as prime d’activité will increase by an average of 50€ a month, for working people earning the equivalent of the minimum wage, or slightly more than the minimum wage.

University canteens will still offer students meals for 1€ 

Personal housing allowance (aide personnalisée au logement or APL) will not be reduced; there will be restrictions for non-EU students.

The differential high-income contribution known as CDHR (contribution différentielle sur les hauts revenus), brought in last year to ensure a minimum 20% taxation on exceptionally high-income households, has been extended for an additional year.

A new rental landlord status has been created, called bailleur privé (private rental landlord) adding to the current council housing market. The aim is to create more affordable rental housing in the market in areas where there is a lack of accommodation available.
Details will follow in a separate update on rental activities.

From January 2026, all cryptocurrency platforms will be obliged to collect and automatically send details to the French tax authorities of any transactions made by their users.

Public Spending

The government has increased its defence budget in light of the current tensions with NATO. At the same time, they have promised to reduce public spending across various ministries as well as on the investment programme that had been previously agreed for 2030.

Although local authorities may see a reduction in their budgets, the reduction is not as harsh as was originally suggested.  Also, the government is cutting jobs across the public sector, including jobs in unemployment offices, schools and ministries.

Principal Changes for Businesses

There was no reduction in the VAT thresholds for micro-entrepreneurs in the 2026 Budget.
However, a reform is still likely in the near future, particularly with regards to certain categories of activity.

A 20% tax on certain professional assets will be applied to assets owned by patrimonial holding companies with their head office in France, liable for corporation tax, where a shareholder owns at least 50% of financial or voting rights, or where the head office is based outside of France and a shareholder that owns at least 50% of financial or voting rights is tax resident in France.

A surtax will be applied to the very largest businesses from 2027 with increases in various charges and taxes of around 0.3% (increasing to an average of 43.9%).

At the same time, the phasing out of the CVAE (cotisation sur la valeur ajoutée des entreprises), a type of value-added contribution from businesses, has been removed from the Budget, meaning it will still be due by certain businesses.