New French 2026 budget plan – key points for residents

France’s delayed 2026 budget is set to pass in the coming weeks after Prime Minister Sébastien Lecornu confirmed he will resort to using Article 49.3 to pass the text without a vote. 

Assurances from both the Socialist Party and the right-wing Les Républicains that they will not back any vote of no confidence against the government brought forward from the far-left and far-right mean the bill is all but certain to pass.

Following a final passage in the Senate and one more reading in the Assemblée nationale, it should come into force around mid-February, the second consecutive year the budget has arrived late.

While it retains most of the elements of the original October 2025 text, a number of policies have been removed. 

This includes a planned freeze on income tax brackets and the end of the 10% allowance for pensioners in spring income tax declarations, both of which were overturned in debates on the text last year. 

Increased public spending, but lower than previous years

However, Mr Lecornu’s government included several new measures in a bid to win the support of the Socialist Party, based on higher taxes and increased public spending.

Exact budget outlines for Ministries are set to be made available on Friday (January 23), but Mr Lecornu said all services but the Armed Forces, Education, Interior, and Justice Ministries will see funds decrease compared to 2025.

The Agriculture Ministry will also escape spending cuts due to the latest farmer protests, but has recently seen a separate €300million commitment by the government outside of the budget and plans for a new ‘emergency law’.

It is unclear if its ‘budget’ in the text will decrease compared to last year by this €300million sum or also be maintained despite it.

It comes as Mr Lecornu seeks to limit public spending to a 0.8% increase, less than the 1.7% in 2025 and 2.1% in 2024. 

However, this still translates to a year-on-year spending increase of €37billion, higher than the €29 billion expected in October 2025.

The public deficit increase will be kept at 5% of GDP, down from 5.6% in 2025 but below the government’s initial plans in its original October 2025 budget text.

Public spending will increase for lower-income households, with around three million eligible for the ‘prime d'activité’ seeing an average of €50 per month extra.

Additionally, the ‘green fund’ for local authorities to engage in ecological projects will increase by €200million.

However, they will be expected to save around €2billion per year in spending (collectively across the country), lower than the €4billion initially demanded in the initial draft.

A €500 million increased fund for social housing spending will also be made available, aimed at private landlords who supply social housing to the market.

No tax increases for most households 

There will be no additional taxes on most households, with the planned freeze on income tax brackets (which would have resulted in a small tax rise for hundreds of thousands seeing earnings reach higher brackets) removed. 

Taxes on high-income households (the contribution exceptionnelle sur les hauts revenus) will continue into 2026. 

Thresholds will remain the same at €250,000 for single-person households, and €500,000 for multi-adult households.

This tax will remain in place as long as public debt to GDP increases exceed 3% annually.

Businesses will be less happy, however. 

Plans to reduce the cotisation sur la valeur ajoutée des entreprises (CVAE) business tax have been scrapped, leading to €4billion in expected revenue for the government, around €1.3billion higher than under the original budget.

Exceptional taxes on the largest companies have also been maintained, with around 300 multi-national companies with earnings over €1.5billion affected.

Estimates are this will raise an extra €7billion in taxes – media are reporting receipts of €700 million from LVMH, €400million from VInci, €300million from Hermès and Airbus, and around €250million from L’Oréal.

MaPrimeRénov maintained 

The MaPrimeRénov’ eco-renovation programme for main homes will also return, after fears it would be cancelled with its funding tied directly to the budget. 

It already faced partial closure last year as it fought fraudulent claims and increased demand and will remain suspended until the budget passes.