What is the Wealth tax?

France often likes to do things differently, and its wealth tax is a prime example. 

Critics point out that France is one of just two EU countries, alongside Spain, that still taxes people's wealth simply for being owned alongside income that is 'earned'. 

Wealth tax was first introduced by a Socialist government under President Mitterrand in 1981 and remained largely unchanged under left-wing leadership, including during François Hollande’s presidency between 2012 and 2017. 

The right-wing Les Républicains pledged at the 2017 elections to scrap the tax, having failed to do so when they were previously in power.

Instead centrist Emmanuel Macron won the election and chose to limit the tax to property, arguing that real estate was less productive for the country than business investments. 

At the time, his decision sparked criticism from the left, who saw it as a gift to the rich. The gilets jaunes protest movement raised similar criticisms. 

Nonetheless, the property wealth tax remains in place. 

In early 2025 there was debate over whether to expand the tax to include other so-called 'unproductive' assets such as cars, yachts, and cryptocurrencies. 

A proposal was introduced in the Senate, but was not passed by parliament. 

Other suggestions have included adding in more incentives to encourage the wealthy to engage in eco-friendly home renovations for their properties. 

In the wider continent of Europe only a handful of countries continue to levy a wealth tax – Norway and Liechtenstein have versions and Switzerland levies at canton and commune level, at low levels (mostly well under 1%). 

Several countries, such as Germany and Luxembourg, abolished their equivalent tax in recent years, while others, like Belgium and the UK, have never had one. 

Italy abolished its wealth tax in 1992 but has since reintroduced one that applies to homes owned abroad and overseas financial investments. 

Meanwhile, Spain has repeatedly changed course, scrapping its impuesto del patrimonio wealth tax in 2008 before reinstating it in 2011 during the economic crisis. This was in theory a temporary measure but the tax continues to be levied. Critics say the French wealth tax actually costs the country money by driving the wealthy to move abroad. 

They used to refer to it – with a play on the initials of the previous tax's name ISF, as an Incitation à Sortir de la France (an incentive to leave France). 

Wealth tax is partly ideological as it has never raised significant amounts for the state coffers.

Historically its main purpose has been symbolic – to be seen to narrow the gap between rich and poor, hence the former name Impôt de Solidarité sur la Fortune (Solidarity Tax on Wealth).

In 2017, it brought in around €5billion for the state, but in recent years that figure has dropped to around €2billion. In comparison VAT – France’s biggest tax revenue source – generates about €100 billion annually.