Income declarations are an annual chore for most people in France but there are several reasons to look on the bright side this year.
These include raised thresholds for the tax bands, certain allowances and new kinds of tax credits. There is also some unexpected good news for those who rent out furnished holiday properties.
We look at eight reasons to be cheerful about tax declarations in 2024 (for 2023 revenue).
Raised bands and allowances
If your real income was similar in 2023 to 2022, then you should pay less income tax due to the starting levels of the various tax bands (after the first 0% band) being raised by 4.5% to compensate for inflation and prices.
The same increase applies to the décote, a system which further lowers tax bills for lower-income households, as well as to allowances for disabled people and senior citizens with modest means.
For 2023 income, single people should not have an income tax liability if their income was €17,133 or less and, for couples without dependent children, €32,000.
Read more: Three ways your taxes will be eased in France this year
New tax credits
Gifts to various charitable associations give rise to tax credits for the giver and, from 2023, there are two new categories of gifts.
A tax credit means a reduction to your tax bill for income in the year in which the gift was made and/or a payment from the tax office if your tax liability for that year is not high enough for you to benefit fully.
Gifts to associations promoting equality between men and women are now listed as eligible at the standard rate of 66% of the gift.
Gifts to the Fondation du Patrimoine between September 15 and December 31, 2023, to help with restoration of old churches in small towns and villages, attract a 75% tax credit for the first €1,000 of a gift and then 66% for amounts over this.
This is linked to a campaign by this French charity, to support many older religious buildings which are in a poor state of repair.
These credits continue for 2024 income to be declared in 2025. Also, as of 2024 income, there is a new tax credit, from 20-60%, for investments into ‘green’ industries (such as manufacture of wind turbines or solar panels).
Income allowance for some furnished rentals
One group of people can benefit from a surprisingly large – 92% - ‘super’ allowance for 2023 income, despite attempts to reduce the usual advantages for micro-Bic furnished holiday rentals.
This is because it has been agreed that changes voted to the 2024 finance law regarding reduced income thresholds and allowances do not have to be applied to income from 2023, while at the same time an ‘extra’ allowance for certain properties, detailed in the same law, will apply.
Read more: Gîte owners urged to take advice on tax changes
To benefit from a 92% micro-Bic income allowance, the following must apply:
You had income from classified, star-rated furnished holiday rentals or from a chambre d’hôtes in 2023
Your property is not located in an area deemed to be under pressure for housing
This income was not more than €15,000
If unsure whether you are in a zone tendue (under pressure area) or not, see the simulator tool at this link.
The 92% allowance derives from the ‘old’ 71% for star-rated furnished rentals and for chambres d’hôtes plus an ‘extra’ 21 percentage points for furnished rentals in zones non-tendues referred to in the 2024 finance law.
Increased tax advantage for unfurnished rental
If you let property unfurnished on the réel (real) expenses regime (obligatory if receiving above €15,000 of annual rental income on unfurnished properties), and you have large expenses in a given tax year, you may benefit from the déficit foncier system.
If so, the ceiling for this advantage is to rise for expenses in 2023, 2024 and 2025, within certain conditions.
Expenses on properties are deductible from the income they generate. If the expenses exceed income the difference is deductible from other taxable income in the same tax year (eg. income from salary, pension etc). This deduction from other income is the déficit foncier and it is usually capped at €10,700/year.
From this year, any expenses which help raise the DPE energy rating of a property up from E, F or G to a D rating or better, can be used to take this limit higher, to a total maximum déficit foncier of €21,400.
‘Immediate tax credit’ system extended
As of 2023, people paying for childminding and crèches could use the new ‘immediate tax credit’ option to immediately benefit from half the cost price (within ceiling limits), but only for care related to children aged over six.
From 2024 it is possible to use this for the care of younger children as well.
The ‘immediate tax credit’ scheme is also available for services provided at your home such as cleaning or gardening. It is possible to benefit both when paying a firm or association and if you employ someone directly.
Other plus points include:
For the second year running the French TV licence fee is not payable, so there is no need to select the box to say you do not have a television to be exempt which was previously the case
Tips for workers are again tax-free
A tax credit towards the cost of installing an electric car charging point is maintained
