France finally passes 2026 budget - what it means for residents
Budget has measures to help homeowners and low earners but is more punitive to business and local authorities
For Prime Minister Sébastien Lecornu, the success of his budget closes a long period of political uncertainty that began with the collapse of his predecessor’s government in 2025
Antonin Albert/Shutterstock
France’s 2026 budget has been adopted definitively after two no-confidence votes against it failed, ending months of political deadlock.
It includes measures to help homeowners and low earners but imposes new burdens on big business and local authorities.
After months of repeated stalemates, Prime Minister Sébastien Lecornu forced the bill through the Assemblée nationale without a vote on January 30 using Article 49.3 of the constitution, a measure that exposed his government to no-confidence motions.
Two motions of no confidence were filed, by the far-left La France insoumise and the far-right Rassemblement national.
Both motions were rejected by MPs on the evening of February 2, ensuring that France now has a budget for 2026.
The final text retains the main elements of the original draft submitted in October 2025, but several controversial measures were removed following parliamentary debate, including a planned freeze on income tax brackets and the removal of the universal 10% allowance for pensioners.
It also included the €2 fee on packages from outside of the EU, but rejected a higher version of this proposed by the Senate, which had suggested a fee of €5.
The fee is considered to be aimed largely at Asian e-commerce sites such as Shein but will ultimately affect all packages with contents valued at less than €150 received from outside the EU.
It comes in addition to the EU’s own tax on non-EU packages, which is set to come into effect in July.
Winners: renovating households, students and farmers
Low- and middle-income households are among the beneficiaries.
The prime d’activité, a monthly supplement for lower earners, will rise by approximately €50 for three million recipients. Social benefits will be broadly revalued, and the €1 student meal scheme will be extended nationwide.
The MaPrimeRénov’ scheme, which supports eco-renovation of main homes, will continue. Agriculture also avoided cuts after sector protests, with a 2026 budget of roughly €6billion.
Additional funds include €130million for vine uprooting, €60million for hydraulic projects, and €40million for cereal growers. Defence spending is also increased by over €6 billion.
Losers: big business, local authorities and high earners
The budget maintains a public deficit of 5% of GDP, down slightly from 5.6% in 2025. Cuts fall mainly on state operators, ministries excluding Defence, Education, Interior, Justice and Agriculture, and some investment programmes, including the France 2030 investment scheme for businesses, which is to be cut by €1.1billion.
It also renews the exceptional tax aimed at high earners, the contribution différentielle sur les hauts revenus (CDHR).
This measure, introduced in the 2025 finance law, ensures that the minimum tax rate is 20% for people who earn €250,000 a year (or €500,000 for couples).
Local authorities are expected to save about €2billion collectively, although some increases were granted, including a €200million rise in the green fund and €1billion for overseas territories.
Companies face a heavier tax burden than anticipated.
Planned relief on the cotisation sur la valeur ajoutée des entreprises (CVAE) was scrapped, raising an extra €4billion for the state.
Exceptional taxes on the largest companies, affecting roughly 300 multinationals with earnings over €1.5billion, will continue, generating an additional €7billion in revenue.
‘A socialist budget dripping with taxes’
For Prime Minister Lecornu, the success of his budget closes a long period of political uncertainty that began with the collapse of his predecessor’s government in 2025.
Socialist MPs supported the bill - or at least did not back the no-confidence votes - after negotiations between Socialist Party leader Olivier Faure and Mr Lecornu.
In return, the Socialists secured several concessions, including an increase to the prime d’activité, the expansion of the €1 meals for students plan, and the continuation of the tax on large companies.
Patrick Kanner, president of the Socialist group in the Senate, framed the outcome as a broader gain for citizens.
“It is a victory for the French - for all those people who should be more than mere variables in budgetary errors year after year. It is good that 200,000 people are spared income tax, which would have been a sanction for those struggling to make ends meet,” he told Public Sénat.
Some Socialist senators also described the result as a political victory for the party.
However, Communist Party opponents of the law called it “austerity therapy” for public services
At the other end of the political spectrum, far-right leader Jordan Bardella remains fiercely critical. “I hear a lot of people saying, ‘A budget is better than no budget’. Rhetorically speaking, that's true,” he told BFMTV.
“But this is a socialist budget dripping with taxes that will increase compulsory levies by nearly €30 billion, with new taxes on French businesses.”
