Grants, savings, tax: how will your finances change in France in 2023?

[Article updated on January 2 at 16:00 with further information on the new income tax bands.]

Bank fees cap

Banks have agreed to limit fee increases to no more than 2%. They have also committed to reduce the maximum bank fee charge for low income clients from €3/month to €1/month.

Savings rates rise

Livret A rates will rise on February 1, possibly from 2% to 3%, though this is yet to be confirmed as the final calculation will be done in January. Rates of the LDDS savings account are also in line with the livret A.

The rate of the LEP (livret d'épargne populaire) will also rise from its current 4.6%, based on inflation and also the rate of the livret jeune. The latter varies bank by bank but is never less than 2% or less than the rate of the livret A.

The rate for new plans d’épargne-logement rises from 1% to 2% from January 1. The rate of comptes épargne logement, currently only 1.25% is also expected to rise.

Rates for other, ordinary, savings accounts (without tax advantages) may rise slightly this year, depending on banks' internal decisions. One trend to look out for is more banks offering comptes à terme, an account with a favourable rate, but where you cannot access the money for a defined period of time.

Pension age increase debate

Reform of French pensions is to be debated in parliament, with the plan for the pension age to start rising from the summer, probably by four months a year until it reaches 65 by 2031, as opposed to 62 today – though President Macron has said he is open to the possibility of limiting it to 64. Protests are expected.

The first people to be affected would be those born in 1961.

Wood-burner fuel grant

A grant of €50-€200 for households using wood-burning heaters is to be given out in early 2023. Eligibility will be income-based.

You can claim it at chequeenergie.gouv.fr and will need your numéro fiscal French tax number and a previous wood bill.

A ‘cheque’ will be posted out to be presented for money off a future bill.

Read more: Am I allowed to sweep my own chimney in France?

Income tax band rise

Income tax bands will rise by 5.4% to index them with inflation, helping to reduce tax bills.

Read more: Changing tax bands in France: How much could you save in 2023?

The thresholds for 2023 will be as follows:

• 0% - Taxable revenue per person: Under €10,777 (up from €10,225 in 2022)

• 11% - €10,777-€27,478 (€10,226-€26,070 in 2022)

• 30% - €27,479-€78,570 (€26,071-€74,545 in 2022)

• 41% - €78,571-€168,994 (€74,546-€160,336 in 2022)

• 45% - Above €168,994 (Above €160,337 in 2022)

Minimum wage increases

The Smic minimum wage will increase by 1.8% on January 1, with an additional €24 net per month. This follows several rises last year, in January, May and August.

People receiving the Smic will now earn €1,709.28 gross and €1,3353.07 net per month.

Inheritance tax changes

Follow-up is still awaited on inheritance rule changes, as promised by President Ma­cron prior to re-election.

He pledged to increase the tax-free deduction between parents and children and to lower taxes for other relatives, such as stepchildren.

Read more: EU to review legality of recent French law on children’s inheritance

Read more: What could you do to ease effects of France’s 2021 inheritance law?

Undeclared swimming pool tracking

Use of Google Earth satellites is to be extended to more areas after proving in a trial a lucrative tool to track undeclared swimming pools.

Authorities compare images showing pools in gardens with tax registers to see if pools have been declared, a factor which can raise taxe foncière.

Read more: Can I add a swimming pool to French home without paying more in tax?

UK National Insurance top up increase

Voluntary National Insurance contributions to top up a UK state pension from abroad are set to go up in line with a 10.1% hike in the consumer price index in September 2022.

They will rise to £3.45 and £17.45 from April.

Mayors plan to find funds

One in five mayors are reported to be looking at raising local tax rates, including a 50% increase in Paris for the taxe foncière.

To save money, most mayors are considering reducing use of street lighting and most plan to turn down heating in sports facilities and public buildings.

Vacant property tax rise

Owners of vacant properties and second homes in many areas are likely to see their local tax bills rise soon due to increases to taxe sur les logements vacants on empty homes and additions to areas classed as zones tendues (places which have housing shortages) where mairies can opt to levy a 5-60% taxe d’habitation surcharge as a way to encourage main residences.

A new list is expected to include 5,000 communes, as opposed to the current tally of 1,149 spread across 28 urban areas. You can check if your area is listed.

Read more: Second home tax increase: Where in France may be affected by new law?

Mortgage rate rise

Bank mortgage rates are expected to continue to rise. Most are more than 2% now, some 3%, which has not been seen since 2016.

Broader child support payment criteria

A service to facilitate pensions alimentaires support payments, which opened last year for divorcees with children, is being extended to apply to other separation/divorce scenarios where children are concerned, including unmarried couples.

An agency run by Caf and the MSA will take payments from the ex-spouse’s account where financial support has been decided by a judge, and pass them on (unless both parties opt out).

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