In France, the tax year for individuals is the calendar year and here are some of the French tax and finance law changes for 2024:
French minimum wage increased for inflation
The French minimum wage, known as the Smic, has been increased by 1.13% to €1,766.92 per month before taxes. This is for those who work 35 hours per week. The net pay after tax is approximately €1,398.69.
French state pensions increased for inflation
French state pensions have increased by 5.3% from the 1st of January 2024 and these increased pensions will be paid from the 9th of February. In France, most people do not have a separate company pension as employers must pay into the public pension system and this is also why state pensions are higher than in some countries such as the UK.
Increase in income tax thresholds
French income tax, known as impôt sur le revenu (IR), has had its annual income thresholds increased by 4.8%. The new thresholds for income tax apply to your 2023 income and and will be payable after your income tax declaration in 2024:
Up to €11,294: 0 %
€11,295 to €28,797: 11 %
€28,798 to €82,341: 30 %
€82,342 to €177,106: 41 %
Above €177,106: 45 %
Note that if you earn €200,000, for example, it is only the part above €177,106 that is taxed at 45%.
Increase in taxe foncière
French property owners tax, known as la taxe foncière, will increase by at least 3.9% due to inflation.
Taxe d’habitation for second homes
Taxe d’habitation was ended in 2023 except for second home owners. There are changes for 2024 and your property could also be subject to a vacant homes tax if it has been vacant for at least two years. These are known as the taxe sur les logements vacants (TLV) and the taxe d’habitation sur les logements vacants (THLV).
Tax reliefs for renovation of old rental properties
The tax reliefs that make part of the “dispositif Denormandie” have been extended to the end of 2026.
Increased help for energy efficient renovations
Help to individuals to make energy-saving renovations to their property has been increased to up to €63,000. This is calculated as up to 90% of renovation work costing up to €70,000. There are several other important changes too, which you can read about here.
Subsidised electric vehicle rental at €100 per month
This is available to low income households who live at least 15 km from their work or drive more than 8,000 km per year for their work. You can read more about it here.
Increased penalties for polluting vehicles
Increased taxes for for the vehicles known as touring vehicles (véhicles de tourisme). These are cars such as pick up trucks with at least five seats with an exception for cars fitted for wheelchairs. There is also increased taxation for heavy vehicles and the tax based on the age of the vehicle has been replaced by a tax on its emissions. For information on these changes and others, you can consult this official page.
Extension of 0% mortages for first time buyers and energy renovations
The French subsidised 0% mortgages, known as prêt à taux zéro (PTZ) have been extended to 31 December 2027 rather than new applications being refused from 31 December 2023. The rules have also been changed slighly in order to help first-time buyers to buy new-build properties in places with housing shortages or to purchase existing properties requiring renovation. The maximum income limits have also been changed.
Subsisided 0% loans for energy-efficiency renovations, known as éco-PTZ, have also been extended for a further four years.
Increase to the interest rate of the Plan épargne logement (PEL)
The interest rates for Plan épargne logement (PEL) have been increased to 2.25% from 2%. If your account has been opened for at least three years then you could obtain a mortgage at a rate of 3.45%.
Slight easing in mortgage criteria
27 year mortgages are now available for the purchase of existing properties with a renovation project representating at least 10% of the value of the property. Previously, 27 year mortgages were only possible for new-build properties as you can often delay repayments for two years at the start of the mortgage. For all other mortgages, the maximum term remains 25 years.
No more Plan épargne retraite (PER) for minors.
The Plan épargne retraite product is no longer available for miners, but a new product has been created for those under 21 years old, called the Plan d’épargne “Avenir climat”.
Pole emploi becomes France Travail
The French unemployment benefits and job service, known as Pole emploi, is changing to France Travail (francetravail.fr) from February 2024.
Evolution of company profit-share tax reliefs
The company profit share scheme, known as the “prime de partage de la valeur”, or informally as the “prime Macron”, has had a rule change and the payments are no longer free of French social security contributions except for small companies and for smaller payments which will remain free of social security contributions until 31 December 2026.
Dispositif Pinel tax reliefs reduced
Tax reliefs for the purchase of new-build buy to let properties, a regime called the dispositif Pinel, have been reduced in 2024 and will be removed entirely in 2025.
A tax reliefs for properties rented out on application such as AirBnB have been reduced from 71% to 30% but the government is looking to cancel this change as it was voted for by mistake as it was included in an amendment accepted by the government.
There are more tax and finance rule changes too. If you would like help with your financial planning and investments in France then feel free to contact us at email@example.com.
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