More than half of households pay no income tax

If you paid income tax last year and your income was largely the same in 2025 as in 2024 you should find you are due to pay a similar, if not lower, amount this year. 

By and large there have been no major changes to the tax system in the last 12 months and France continues with its mixture of tax at source through the year combined with an annual spring declaration, which can lead to ‘regularisation’ amounts being due by you – or paid out to you – later in the year. 

In most cases any payments to you or by you take place by transfers and direct debits without any action on your part, as long as you have supplied the tax office with details of a French / SEPA area bank account. 

Note that even if your account is in the SEPA area outside France, it is worth double checking with your bank that it allows for ‘SEPA direct debit’ (in French prélèvement Sepa) in the SDD Core version (for members of the public as opposed to businesses). See tinyurl.com/dss-core.

France is sometimes seen as being a high-tax country, but this is not necessarily the case as regards impôt sur le revenu (income tax). In fact only 47% of households paid income tax on 2024 income declared in 2025, after all allowances and credits were taken into account. 

Having said that, tax service figures show a significant increase in overall income tax taken last time, linked to the fact that average salaries rose more than inflation, and there were good returns on investments. These factors saw, among other points, more tax taken via the ‘flat tax’ applied to many forms of investment income (as opposed to the progressive bands) and from the additional income tax applied to those with very high incomes (over €250,000 for a single person or double for couples).

Financial experts often report, however, that many foreign retirees who move to France are pleasantly surprised to find that their tax has dropped overall, for a mixture of reasons, including the quotient familial system, which reduces income tax proportional to size of household starting with couples, as well as certain exemptions and allowances. 

Changes to percentage rates of the tax bands first introduced in 2020, with the first taxable band (after the 0% band – essentially a tax allowance) lowering from 14% to 11%, remain in place. The levels at which the different French tax bands start and finish have also been adjusted up by 0.9% for 2025 income to keep pace with inflation. 

This means that, if your income last year did not keep pace with prices, you may pay less tax this year than before as more of your income will fall into the tax-free or lower income bands. 

The 0.9% boost also applies to other related factors such as deductible contributions to needy relatives, called pensions alimentaires, the maximum benefit obtainable from the quotient familial, and the level of the décote, a system that further lowers tax bills for lower-income households. 

For 2025 income, the 11% band starts from €11,601. However, in reality a single person with no children (who in tax terms counts as one unit or ‘part’) will only start paying tax on 2025 income (bearing in mind the décote and the fact that tax is not collected under €61), from €17,595 of net taxable income, and a couple from €32,859. 

While the raised brackets benefit everyone, the money saved is likely to be greater the higher your income, as it can mean avoiding moving into one of the highest bands, or at least reducing the amount taxable to them. 

As mentioned, a 0.9% increase is also being applied to the décote, as well as to a special allowance for older or disabled people with ‘modest’ means, meaning those who benefited last time will receive more money off, for the same income levels, or may become eligible for a lower rate. 

The thresholds for at-source tax have also been revised upwards from 2026 for amounts taken off salaries, French pensions etc. 

Away from income tax, the year 2026 is the fourth year in a row in which all main-home owners have been exempt from the taxe d’habitation residential tax. In addition, since 2023 no one has to pay the French TV licence. 

On the downside, an increasing number of communes are able to levy a surcharge on taxe d’habitation on second homes due to new areas being classified as suffering housing pressures.