Introduction: a French budget under pressure for 2026

France enters 2026 in a context of demanding budgetary consolidation. The public deficit, still estimated at 5.4% of GDP in 2025, must be reduced to 5% of GDP in 2026. It is within this framework that the French Finance Act (Act No. 2026-103 of 19 February 2026) was promulgated, after a particularly turbulent parliamentary process.

With a state deficit of €134.6 billion and public debt exceeding 118% of GDP, the French government had to make difficult choices: targeted tax increases, removal of certain loopholes, and spending cuts outside national defence.

As chartered accountants based in Paris, France, our firm ECR closely monitors these developments to help you anticipate their impact on your personal and professional tax situation. Feel free to consult our complete guide for company managers .

Measures for individuals

The 2026 French Finance Act brings several significant changes for French households, whether regarding income tax, housing, or purchasing power.

1. Income tax bracket adjustment

The brackets of the progressive income tax scale are adjusted upward by 0.9% for the taxation of 2025 income (compared to 1.8% last year). Thresholds, caps, and allowances are also revalued by the same proportion.

2. Differential contribution on high incomes (CDHR) — extended

Introduced in 2025, the CDHR guarantees a minimum tax rate of 20% for the wealthiest households. It is extended until the public deficit falls back below the 3% of GDP threshold. It concerns households whose reference tax income exceeds:

• € €250,000 for a single person
• € €500,000 for a couple taxed jointly

3. Housing: “Relance logement” scheme and MaPrimeRénov’

The Act creates a new “private landlord” regime allowing tax depreciation of a new rental property in a high-demand area or a renovated property. Furthermore, MaPrimeRénov’ is reopened to all households under the same conditions as in 2025, with a mandatory appointment at a France Rénov’ advice centre before any application.

4. Tax reduction for donations

Donations to organisations helping people in difficulty qualify for a tax reduction of 75% up to €2,000 per year (previously €1,000).

5. Small parcel tax (e-commerce platforms)

From 1 March 2026, a tax of €2 per item applies to small parcels imported from foreign e-commerce platforms (such as Shein, Temu, etc.), to rebalance competition with French retailers.

6. €1 meals in university restaurants

From 1 May 2026, all students enrolled in higher education will be able to get a full meal (starter, main course, dessert) for €1 in CROUS restaurants.

7. Home savings plan (PEL)

PELs opened from 1 January 2026 will earn an interest rate of 2% (compared to 1.75% for those opened in 2025).

Important tax changes to know about

Tax on asset-holding companies

One of the major innovations of the 2026 French Finance Act is the creation of a specific tax targeting asset-holding companies that accumulate assets not used for a real economic activity (“cash boxes”). The scope is narrower than in the initial draft.

Increase in CSG on certain capital income

The French Social Security Financing Act for 2026 increased the CSG rate by 1.4 points on certain capital income, from 9.2% to 10.6%.

Tougher car taxation

The weight-based penalty is strengthened for heavy electric and plug-in hybrid vehicles in France. The rate of the air pollutant emissions tax is increased. Measures to fight against “fake utility vehicles” are also introduced.

Priority and rural zones

The Act ends ZFU-TE (urban free zones) and introduces new exemptions in priority neighbourhoods (QPV). It also extends the inclusion of rural revitalisation zone (ZRR) communes in the France ruralités revitalisation (ZFRR) zoning.

Local authorities

The Dilico scheme smoothing local authorities’ tax revenue is maintained in 2026, representing an effort of €740 million. Municipalities are fully exempt from this levy. An annual state premium of €500 is introduced for mayors.