We look at changes coming in 2025 which affect pensions, tax, notaire fees, inheritance...
Note that some may be subject to change given the current political uncertainty in France, highlighted #.
Inheritance law decision?
A decision from the European Commission is awaited on the legality of France’s 2021 inheritance law, which seeks to impose French forced heirship rules on the estates of those who opted in their wills for the law of their nationality to be applied.
The French law means many who have made, for example, UK/US-law wills favouring their spouse (as an EU regulation allows them to), face having their wishes ignored in favour of large portions being given to their children after they die.
There have been multiple complaints to the commission, with hundreds of Connexion readers joining a campaign against the law.
Read more: French inheritance law: couples anxiously await EU decision as discussions continue
Interest-free loan extended
The interest-free loan for home purchase, currently restricted to those buying new flats in areas subject to housing pressure, will be extended to all first-time buyers from February 1.
With interest rates still above 3%, this return to wider availability of the scheme is aimed at helping many more buy a property.
# indicates points that may be subject to change due to France's political uncertainty
Tax bands
# Income tax bands set to be applied in 2025 on 2024 income have risen by 2% in line with inflation. A freeze had been envisaged as the government sought to reduce its deficit.
The new bands are: Up to €11,520 = 0%, then to €29,373 = 11%, then to €83,988 = 30%, then to €180,648 = 41%, and above this, €45%.
More tax on holiday rentals
New tougher tax rules on furnished holiday rentals and chambres d’hôtes will start for income earned in 2025.
The old familiar rules will remain in place for income from 2024 declared in 2025.
A previous set of new holiday rental rules set out in the 2024 finance law has been scrapped.
The new rules for micro-Bic rentals are: 50% allowance for classified holiday rentals and for chambres d’hôtes within a micro-Bic ceiling of €77,700 turnover (down from 71% and €188,700 in the old, familiar rules); otherwise, a 30% allowance within a limit of €15,000 (down from 50% and €77,700).
# It is also being proposed, but subject to confirmation, that holiday rental properties rented via the régime réel (as opposed to the micro-Bic) tax set-up will now incur higher capital gains tax.
This is due to an intended change to rules on amortissements (depreciation).
Those who let furnished property as non-professional landlords under the réel regime can deduct depreciation (wear and tear) amounts from their taxable earnings meaning they pay less tax. It is intended that amounts claimed in this way should be “re-integrated” when the property is sold, effectively lowering the purchase price used in the tax calculation thus increasing the amount of capital gains tax payable.
Read more: Holiday rental laws to be toughened in France in 2025
Wealth tax
# France’s property wealth tax could be replaced, as of 2025, by a new version on “unproductive” wealth, extending it to, for example, yachts, jets and cryptocurrency.
This idea remains to be confirmed, along with a proposal to exempt from gifts tax family gifts of money for the purchase or renovation of a main home.
The latter is intended to last only two years, and for amounts up to €100,000.
New local taxation?
A return of taxe d’habitation has been ruled out by the government, but consultation will continue with local councillors over demands by the latter for more power over their local financing, such as via a new contribution citoyenne towards funding of local services.
This could, it is suggested, be payable by residents in a given commune whether they own property or not, on a sliding scale based on means.
Further studies and consultations into the implementation of such a contribution will take place at the start of 2025.
Read more: ‘Contribution citoyenne’: What is this new residents' charge proposed by French mayors?
A rise in notaire fees?
# Departmental councils were expected to be permitted to increase the rate of their part of notaire fees on property sales from June.
Despite the term 'notaire fees’ much of this (adding up to an additional 7-8% on top of the property price) comprises taxes passed on to national and local government, with the majority going to the departmental council. Just a part is payable to the notaire for their work.
An amendment to the 2025 budget allowed for the departmental council to increase their rate from 4.5% to 5% of the property’s price.
This means that for a property of €300,000, the total notaire fees on will increase from around €22,500 to €24,000.
This proposal was rejected alongside the entirety of the 2025 budget but is popular with local authorities (as it increases local funding available to communes) and may return in an updated budget presented at the start of next year by the new prime minister François Bayrou.
Read more: Notaire fees expected to rise for home purchases in France
Topping up UK state pensions
Those wanting to top up missing years of National Insurance contributions for the period between April 2006 and April 2017 have until April 5, 2025 to do so.
After this, it will only be possible to top up the previous six tax years.
Help for single-parent families
From this year the benefit complément de libre-choix du mode de garde (CMG), which goes towards childcare, will allow single-parent families to benefit from this until the child is aged 12, as opposed to six.
Pensions set to rise
# The government had planned to limit the usual rise in state pensions, set for January 1, to just 0.8%, with a further 0.8% from July 1 for those on the lowest pensions.
This is as opposed to the 2.2% rise which would usually have applied from January, under the usual cost-of-living increases.
The latter is now expected to apply, after the vote of no confidence toppled former prime minister Michel Barnier and his 2025 budget.
Read more: Ministers to debate emergency law so France can continue to collect tax and pay expenses
More tax on the wealthiest?
# A new tax, called contribution différentielle sur les plus hauts revenus, aimed at making sure the wealthiest households pay a minimum of 20% income tax on average on their income (ie. as opposed to less via various tax breaks) was included in the original 2025 budget.
It would have affected those with income of more than €250,000 for a single person or €500,000 for a couple.
The largest companies were also being asked to contribute more; a contribution exceptionnelle sur les bénéfices des grandes entreprises comprising an extra amount over their corporation tax liability. It was to be levied on France’s 450 largest firms - those with turnover of €1 billion or more - in 2025 and 2026.
Both measures were thrown out alongside the 2025 budget.
However, as these measures were approved during debates on the now-scrapped 2025 budget and received widespread consensus, they may return in Mr Bayrou's upcoming budget.
