The Finance Bill 2025 was presented to the Council of Ministers on 10 October. In this article, we take a look at the main tax measures envisaged and their potential impact on individuals.

The bill defines government revenue and expenditure for the coming year. At a time when French debt stands at over €3,000 billion, or 111% of GDP, and is expected to grow by 7% of GDP by 2024, the budget situation is becoming critical. Faced with these challenges, the State is looking for new sources of funding, in particular by turning to high incomes and substantial assets. However, some of the reforms envisaged could also affect a wider section of taxpayers. Here is an overview of the main measures likely to be introduced:

Revaluation of income tax brackets

Let's start on a positive note: the brackets on the income tax scale should be raised by 2% to bring them into line with inflation. In practice, this will mean lower tax for the same income. This is good news for taxpayers, who will see their tax burden lightened slightly.

Non-professional furnished tenants (LMNP): taxation of depreciation

A major reform will affect non-professional furnished tenants (LMNP). From 1 January 2025, when a property is sold, the depreciation deducted during the rental period will have to be added back when calculating the taxable capital gain on the property, in accordance with article 39 C of the General Tax Code (CGI). This means that individuals who have opted for the real estate tax system will have to subtract from the purchase price the total amount of book depreciation deducted over the years. This measure will result in higher taxation when the property is resold.

Increase in Flat Tax (Prélèvement Forfaitaire Unique)

Another measure under discussion concerns an increase in Flat Tax. Currently set at 30%, it could rise to 33% for most taxpayers and 37% for high earners. This increase would apply to all income from transferable securities, such as dividends and interest.

Increased taxation of high incomes

The bill also envisages an increase in the tax burden on high earners. Two options are on the table: a minimum tax rate of 20% or the abolition of certain tax reductions and credits for the wealthiest taxpayers. The details of this reform have not yet been finalised.

A climate of uncertainty

The political context in France remains uncertain, with the government finding it difficult to secure a majority to pass certain reforms. This climate is slowing down the decision-making process, and adjustments to the bill are expected between now and the end of the year.

It is important to remember that in these turbulent times, it is essential to be accompanied by a wealth management adviser to keep abreast of the changes that could impact your wealth.

The Wealth A7 team is at your side to help you build a tailor-made wealth management strategy tailored to your wishes and needs, adapting precisely to tax, economic, legal and social changes.