France’s 2026 budget focuses on cutting costs, with proposed changes to pensions, income tax bands and benefits, as well as reviews of property and wealth taxes, banking rules, charitable donations and parental leave.
1. 2026 budget seeks to save money
Note that changes marked # are included in the ongoing negotiations for France's 2026 budget and may be subject to change, depending on the final budget text.
Many tax and other money changes were proposed by the government as part of the budget - largely aimed at cost-cutting and debt reduction - but now remain uncertain.
As the main 2026 budget was not passed in time an ‘emergency finance law’ to temporarily carry over the previous budget will apply for the second consecutive year.
New attempts to pass a watered-down budget will start in early 2026. These will see several aspects removed, including some that would apply immediately from January 1, 2026 and therefore can no longer be introduced as this deadline has been missed.
Items originally raised in budget debates that could return later in other forms (such as separate bills) include reducing the time required for ownership of a second home before it is exempt from capital gains tax, increasing the inheritance tax allowance for stepchildren, and changing IFI property wealth tax to a more general tax on ‘unproductive’ assets.
Note that the original 2026 budget will definitely not come into force on January 1. Some items detailed below are subject to change and the future 2026 budget. These are highlighted #.
# A freeze on income tax bands as well as on many benefits and on French state pensions is proposed.
If the freeze, also called an année blanche (blank year), goes through, people will pay more tax on 2025 income declared in 2026 than on 2024 income, if their income has increased with inflation.
MPs rejected this during debates but, as the final budget text which included the inflation-based increase to tax bands failed to pass, bands currently remain at 2025 levels and would need to be manually increased before spring declarations.
This could come as part of the future 2026 budget, or through a separate law. In 2025, MPs voted to increase bands in line with inflation to avoid this issue despite the budget not being passed on time.
# Housing benefit, disability benefits, and pension payments would also not be uprated for inflation, it is proposed. From 2027, pensions would be under-indexed to inflation by 0.4 points a year. Again, this depends on the future 2026 budget.
Supplementary pensions paid by Agic/Arrco will also not increase in 2026, after unions and employers failed to agree on terms of an annual rise.
# 10% tax allowance for pensions to be replaced by a fixed €2,000, lowering tax for some low-income households and raising it for medium-income households. MPs rejected this during budgetary debates before the ultimate failure of the bill, so it is unlikely to return.
# End of collège (€61) / lycée (€153) / university (€183) tax reductions that help towards educational costs was proposed in the original budget but was rejected by MPs. It is considered unlikely to be re-introduced in future budget discussions for 2026.
# End of preferential tax rates for E85 and B100 biofuels, probably resulting in an increase in their price. This is unlikely to resurface however as it was ultimately rejected by the National Assembly and the Senate.
# €2 tax on small parcels from outside the EU. This is in anticipation of EU plans to introduce a similar levy EU-wide.
# High-income surtax extended: minimum 20% effective income tax rate for high earners expected to continue for 2025 income declared in 2026.
The 2023 reform raising the retirement age to 64 has been suspended until January 2028.
As this was part of the Social Security Budget (separate to the main budget) which was passed, it is guaranteed to come into force. The main groups affected: those born 1964-early 1965, plus slight easing for those born up to 1968.
# Non-EU foreign students to be excluded from housing benefit, other than those who receive hardship grants.
# The government proposes pushing back the age at which families receive a higher monthly rate of allocations familiales for second and subsequent children from 14 to 18 years, and divert savings towards a new kind of parental leave (see below).
Each parent of a newborn can opt to take an additional congé de naissance birth leave of one to two months in addition to statutory maternity or paternity pay.
The new allowance will not apply until July 1, however, parents of children born January 1 and May 31 may still be able to benefit from it retrospectively.
# Gifts to eligible charities helping those in need to benefit from a 75% tax reduction within a limit of €2,000, doubled from €1,000 (after this, the reduction is limited to 66%).
2. Gift giving
Declarable gifts (donations) received in France cannot, from January 1, 2026, be declared on paper forms. Instead, outside of limited exceptions, declarations must be made via online personal tax accounts. Click déclarer and then déclarer un don.
3. Communes
More than 200 additional communes were classified as zones tendues (facing housing shortages) in 2025. This allows these communes to impose a taxe d’habitation surtax on second homes in 2026 of between 5% and 60%.
Communes include several near Dunkirk (Nord) and in the Alps.
4. Pensions
Those who previously worked in the UK and want to top-up their pension entitlement from France have only until April 2026 to do so at the lower Class 2 voluntary national insurance contribution rate, if eligible to do so.
This applies to people who were working in the UK prior to moving and are still working in France. In a UK government money-saving measure, moving forward it is only possible to top-up if you lived in or contributed in the UK for at least 10 years and only at the higher Class 3 NIC rate.
5. Wealth Tax
Proposals for a ‘Zucman tax’ – a suggestion that the very wealthy should pay at least a certain minimum percentage of their total wealth in tax every year – were rejected from the 2026 budget, but may return in some form in the course of 2026, eg. if presented as a proposed law by a group of MPs.
6. Banking
From November new rules on bank overdrafts come into effect, aligning them more with other forms of consumer credit. Overdrafts are likely to be given in a less ‘automatic’ manner, with more checks made on customers’ standing.
Improvements are being made to contactless payment technology, with more stable networks enabling a payment card to be a little further away from the machine so leading to fewer failed payments. It could also see the method become more widespread.
More people will be able to withdraw cash directly from shops such as bakeries, florists, grocers etc in 2026, as a ‘private cash points’ (points d’accès privatifs aux espèces) system introduced in 2019 starts to open up. Previously, only those who banked with the same bank as that available in the shop could access cash this way.
It comes as a rollout of more shared cash machines for customers of BNP Paribas, Crédit Mutuel, CIC and Société Générale is expected to continue this year.
More branches of BNP Paribas are expected to close in 2026 as the bank makes cuts due to fewer people visiting physical branches.
7. Money
A design competition for new Euro banknotes will open up for public votes before the winning designs – to launch in 2028 – are chosen. Two themes are proposed – one based on cultural and scientific figures such as Maria Callas, Beethoven and Marie Curie, and one on rivers and birds.
8. Tax credits
People who claim tax credits for employing (nannies, gardeners etc) will have to provide more information on their employee and the services rendered this year in their declaration of 2025 income.
9. Notaire fees
More French departments are expected to announce they are raising ‘notaire fees’ on property purchases from 4.5% to 5%, as permitted in 2025 budget rules.
10. Self-employed workers
Autoentrepreneurs in France will see social security contributions increase in 2026, in a bid to improve pension and health insurance coverage.
From January 1, new rates will be:
- Vente de marchandises : 12.3%
- Prestations BIC : 21.2%
- Prestations BNC (CIPAV) : 23.2%
- Prestations BNC (SSI) : 25.6%
Self-employed workers will need to set themselves up with a system for electronic billing by September 1, 2026, even if electronic invoices are not mandatory until September 2027. This is the case regardless of if they are eligible for VAT or not.
However, VAT thresholds will not change, as the government announced it will remove the idea from future discussions on the delayed 2026 budget.
Rules on 'responsabilité élargie du producteur' (end-of-life management for products) will begin to apply for some self-employed workers, mostly in manufacturing and distributors of packaged products. Rules will initially be more lenient for self-employed workers, say unions.
Finally, self-emloyed workers will begin to receive 'NAF' codes from national statistics body Insee, to help track French economic activity. They will not be used until 2027, but a transition period where they replace current APE codes will begin.
