Key changes for income and property tax in France in 2024

Increase in both property taxes could hit households but income tax band changes are favourable to most - and some beneficial schemes have been renewed

Households will likely see budgets affected by the tax changes
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Rise in taxe foncière

A rise in taxe foncière, France’s main property tax, is expected for 2024.

The exact figure is not yet known, but it will rise by at least 3.9% across the board, and some communes will face additional increases if local councils vote in favour.

The tax is calculated based on the theoretical rental value of the land a property is situated on, and is tied to inflation. It applies to owners of residential property in France.

Read more: Taxe foncière French property tax: what rises to expect in 2024?

Over 2,000 communes can charge additional second-home tax

From January 1, 2,200 new communes can charge an additional levy on the taxe d'habitation, France’s other main property tax, which now is only levied on second homes.

The additional surcharge is applicable in thousands of communes classed as facing home shortages, mostly in the south and west of France.

An additional surcharge of 5% to 60% can be levied.

Local authorities will still have to vote on levying the charge, which means it will not appear in all communes where it can now potentially be collected.

Strong tax reduction for donations maintained

Those who pay income tax can benefit from tax reductions by donating money to charities, with the current 75% reduction maintained until December 2026.

This means for every €1,000 donated to a charity, you can claim up to €750 back in tax deductions.

However, there is a limit on this, with the reductions only applying on donation/s equalling €1,000 overall per year in 2024, 2025, and 2026.

New income tax bands

France’s income tax bands increased by 4.8% (on income received in the 2023 year).

As this is likely to be higher than the levels of inflation recorded in 2023, it should in theory benefit households, who may not fall into lower tax brackets even if receiving a pay rise.

Anyone whose pay did not increase by more than 4.8% in the year will see the amount of tax they pay fall compared to the previous year.

Read more: See: The new income tax bands for France

Tax exemption on tips

Those who collect tips from their job (such as hotel and service industry workers), will continue to be exempt from paying income tax or social security on them.

The exemption applies to tips up to 20% of a person’s gross annual salaried income over the course of a year – tips earned after this threshold will still be taxed.

The measure was introduced in 2022, and will be debated in parliament in October before potential changes in 2025.

It is aimed at stopping tips becoming a partial replacement of a person’s salary,

No change to tax credit scheme

Potential changes to the immediate advance tax credit scheme (d’avance immédiate de crédit d’impôt) were included in the Social Security Financing Bill, discussed last year.

However, these changes, crucially including a lowering of the €6,000 limit on using the credits, will not be implemented in 2024.

Around one million households use the credits for personal services such as gardening and tutoring.

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