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Explained: How France’s new budget will affect French residents

After the French government pushed through the first part of its 2023 budget, we look at the key measures affecting people living in France

We look at seven different ways the new budget could affect French residents Pic: Fabianodp / Shutterstock

France’s budget for 2023 has been pushed through without a vote after thousands of amendments were lodged by opposition MPs. 

Deprived of an absolute majority in the lower chamber, Prime Minister Elisabeth Borne used the 49.3 constitutional mechanism to automatically pass the first section of the budget. 

Read more: Explainer: what is France’s article 49.3 and why is it in the news

It came after several days of heated debate. 

Some 117 amendments – mainly ones proposed by President’ Macron’s party – feature in the final text, including lowering taxes for small businesses and legalising the use of cooking oil as car fuel. 

The package must be approved by the senate, which is dominated by an alliance between centre-right Les Républicains and the Union Centriste. 

Here are some key budget measures affecting residents: 

Energy price cap 

Regulated gas and electricity prices will be capped at a 15% rise in 2023. 

The government estimates average gas bills will rise by €25 per month instead of €200 as a result of the cap, and electricity bills will increase by €20 instead of €180. Around 12 million low-income households should also receive a cheque worth €100 or €200 to use towards energy bills in December. 

Second homes tax 

The number of communes which can implement a taxe d’habitation surcharge of 5-60% for second homes will go from 1,500 to 5,000. Before, the option was only available to towns of over 50,000 inhabitants. The list of towns is yet to be revealed, but will include touristic areas with a high rate of holiday homes. 

Income tax thresholds rise

The thresholds at which income tax brackets begin are to rise by 5.4%, in line with inflation, meaning workers receiving a pay rise to account for the cost of living will not pay more tax. 

Teacher pay rise

Teachers are set to receive a 10% pay rise on average in September 2023, with additional rises for staff taking on extra responsibilities. 

President Macron pledged all teachers beginning their careers will earn at least €2,000/month. 

Disability benefit changes

A partner’s income will no longer be considered when evaluating eligibility for the allocation aux adultes handicapés benefit given to disabled adults. 

The government claims this will benefit 160,000 claimants, including 80,000 who will be newly eligible, with beneficiaries receiving €300 more a month on average. This reform should be in place by October 1, 2023. 

Energy renovations

The budget for the MaPrimeRénov’ scheme of grants for making homes more energy-efficient will increase from €2.4billion to €2.5billion. 

There will be a focus on helping lower-income households undertake wholesale energy renovations via the MaPrimeRénov’ Sérénité grant. 

Electric vehicles

The bonus écologique grant, which offers help towards purchasing an electric vehicle, will rise from €6,000 to €7,000 for “half of households” on the lowest incomes, President Macron has said. 

Also included is the introduction of a ‘social leasing’ scheme, which will allow low-income households to rent an electric car for €100 per month.

Related links

No confidence motion after government forces through new budget

French cabinet approves right to use 49.3 rule to ease budget deadlock

Inflation, climate, pensions: a tough rentrée for French government

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