French budget is forced through parliament: how could it impact your finances

France is one step closer to getting a budget for the 2025 year after it was forced through the Assemblée nationale earlier this week. 

MPs in the chamber did not get to vote on the bill, as both the state and social security aspects were forced through without a vote using the controversial article 49.3. 

This article leaves the government open to a vote of no confidence each time it is used, however, Prime Minister François Bayrou was not toppled as the motions – brought forward by the far-left – did not gather enough support to pass.

The budget was approved by the Senate today (Thursday, February 6) and will now be reviewed by France’s Constitutional Council (Conseil constitutionnel). 

The Constitutional Council may remove some of the articles of the budget if it deems them outside of the scope of the law, meaning the changes included in the bill are not definitive.

Earlier this week, aides close to the prime minister said the government is aiming for the budget to come into effect by the end of February at the latest. 

Below, we look at how the 2025 budget is likely to affect our readers. 

Tax bands adjusted 

Income tax bands on 2024 income have been increased by 1.8% year-on-year. This increase corresponds to the level of inflation for household goods excluding tobacco in 2024 according to national statistics body Insee. 

Original plans were to see the bands increase by 2%, but this has been slightly readjusted. 

It means over 600,000 households will avoid entering a higher tax bracket. 

The rates can be found in our article below.

Read more: These are the new French income tax rates agreed for 2025 budget

New taxes on flying, boilers, vehicles, shares

A compromise over an increased tax on plane tickets will see the solidarity tax increase to €7.40 per ticket for a European flight (compared to €2.50 currently). 

Original plans in the former budget would have seen this increase to over €9. 

A tax on purchasing shares of large listed companies on the French stock exchange will increase to 0.4% per share (up from 0.3%), lower than the 0.5% the Senate initially voted for. A new tax on buybacks of shares is also included.

The VAT on gas boilers will increase to 20%.

The toughening of the malus on purchasing combustion engine vehicles originally envisioned by former prime minister Michel Barnier – then rejected during debates on his budget – has been brought back.

The maluses will become gradually more restrictive until 2027.

Notaire fee increase 

Departmental authorities will have the option to increase notaire fees (droits de mutation à titre onéreux or DMTO) on a property purchase to 5% (up from 4.5% currently). 

However, they will be able to exempt first-time buyers if they wish. 

Local authorities will be able to bring in the increased rates from March 1, 2025, and more claifty on which departments are to bring in the increases will be available in the coming weeks.

Higher capital gains tax rates when selling accommodation

Tax advantages for non-professional renters of tourist accommodation (loueurs en meublé non professionnel or LMNP) will be reduced. 

Depreciation (amortissement fiscal) of the property will be taken into account when calculating the capital gains tax during a sale. 

Owners will still be exempt from paying the capital gains tax if they own the property for more than 22 years. 

Expansion of zero-interest loans for first-time buyers 

First-time buyers across France will be able to access a zero-interest loan (PTZ) from the government to help fund the purchase, regardless of where they are located.

Previously, this was only possible in certain zones facing a housing shortage (zones tendues), for newly-constructed properties.

It has also been expanded to include non-new build homes.

Tax exemption on property gifts

The budget also introduces a tax exemption on gifts of funds for property-related investments up to a maximum of €100,000 per donor and €300,000 per beneficiary. It will only be possible for certain close family members (including parents or grandparents donating to children/grandchildren).

This tax incentive is aimed at cash donations made as part of an investment in property to be renovated for energy-related work. 

However, it will only apply to main residencies and not second-homes, and recipients will have to live in the property for five-years for the gift to be tax-free.

Taxes on wealthiest 

An extra tax on the wealthiest households will be maintained, however will only apply for one year as opposed to three under initial plans by former prime minister Michel Barnier. 

The tax will only apply to households with a taxable income of €250,000 for an individual / €500,000 for a couple or more – around 25,000 of these exist in France. It will raise around €2 billion

The current prime minister plans to replace this with an ‘anti-optimisation’ tax in the 2026 budget, which should raise around the same amount.

Read more: French PM confirms ‘minimum tax’ will apply for high earners