What Changed for French Taxes in 2026: Everything UK Expats Need to Know

The 2026 filing season covers income earned in 2025. While there were no sweeping reforms this year, several changes affected UK expats directly — including a rise in social charges on investment income, a new default withholding rate for couples, tighter rules on furnished holiday lets, and one significant near-miss that would have hit pensioners hard.

• Social charges on investment income rose from 17.2% to 18.6% in 2026 — pushing the flat tax from 30% to 31.4% — but pension income rates are unchanged
• The 10% pension deduction was nearly abolished during budget debates — it survived, but it's been on the table once and may return
• Couples now have individual withholding rates by default — the total tax bill is unchanged but you need to actively opt out if you prefer the old system
• Unclassified holiday let rules tightened significantly — the annual ceiling dropped from €77,700 to €15,000

The French 2026 budget was passed on 19 February 2026 after a prolonged period of political deadlock. For most individual taxpayers, it is a modest package of changes — but some of them matter significantly for UK expats, particularly those with investment income, holiday rental properties, or pension income.

For a full overview of how the French tax system works, see How the French Tax System Works.

1. Income Tax Bands — Adjusted for Inflation

Income tax rates are unchanged. The five progressive brackets (0%, 11%, 30%, 41%, 45%) remain the same. The thresholds have increased by 0.9% to keep pace with inflation.

The 2026 bands for income earned in 2025 are:

These thresholds apply per share of your household. A married or PACS couple with no dependants has 2 shares, so the thresholds effectively double before rates are applied. See the income tax brackets on the Taxpert reference data page →

2. Social Charges Rise on Investment Income

This is the most significant financial change for UK expats with investment income.

The main social charge on investment income increased from 9.2% to 10.6% from 1 January 2026. This takes the total social charges rate on investment income from 17.2% to 18.6% — and pushes the flat tax (PFU) from 30% to 31.4%.¹

What this affects:

• Dividends from UK and foreign shares
• Interest from bank accounts and bonds
• Capital gains on the sale of shares and securities
• Non-professional furnished rental income (holiday lets)

What this does NOT affect:

• Pension income — social charges on pensions are unchanged
• Unfurnished rental income
• Capital gains on the sale of real estate
• Assurance vie income and gains

Simple rule: if it comes from financial markets or furnished rentals, it's 18.6%. If it comes from unfurnished property, pensions, or assurance vie, it stays at 17.2% (or lower for certain pension income).

For S1 holders, the reduced 7.5% solidarity rate applies instead of the full social charges rate — and this element is unchanged.

See the social charges rates by income type on the Taxpert reference data page →

If you have significant investment income and haven't yet checked whether the sliding scale might be more beneficial than the flat tax for 2025 income, this is the year to model it. The flat rate is now 31.4% — at an 11% income tax rate, the sliding scale will often produce a lower combined liability. See our guide to PFU vs Progressive Tax.

3. New Individual Withholding Rates for Couples

From September 2025, a new default withholding rate system applies to married and PACS couples.

Previously, both partners had the same withholding rate applied to their income — a single household rate calculated on joint earnings. From September 2025, the default is now an individual rate — each partner is taxed at a rate calculated on their own income rather than the household total.²

What this means in practice:

• The higher earner will have a higher withholding rate on their income
• The lower earner will have a lower rate
• The total tax bill for the household does not change — only the split between partners
• This mainly affects couples with significantly different incomes and separate bank accounts

Can you opt out? Yes. If you prefer the old system, you can choose the joint rate option on your 2026 declaration. Look for the option when filing.

For most UK expat couples where one partner has a UK pension and the other has little or no income, this change will reduce the withholding rate on the lower-earning partner's income. The annual return still reconciles the full household position.

4. Furnished Holiday Rental — Simplified Regime Tightened

If you rent out a property in France as a holiday let, the simplified tax regime (micro-BIC) rules changed significantly for income from 2025 onwards.

Unclassified holiday rentals (Airbnb-type lets without an official star rating):

• Annual ceiling reduced from €77,700 to €15,000
• Flat allowance reduced from 50% to 30%

Star-rated holiday lets and bed & breakfasts:

• Annual ceiling: €77,700
• Flat allowance: 50% (reduced from 71%)

If your French holiday rental income exceeded the new €15,000 ceiling in 2025, you cannot use the simplified regime and must declare actual income and deduct actual expenses instead. This requires more record-keeping but often produces a better tax outcome for properties with significant running costs.

Note: holiday rental income is not affected by the social charges rise on investment income — it remains at 17.2%.

5. High Earner Minimum Tax — Made Permanent

A minimum tax contribution was introduced in the 2025 budget and has now been made permanent in the 2026 budget — until France's budget deficit falls below 3% of GDP. With the deficit at 5.6% in 2025, that is not expected to happen soon.³

Who is affected:

• Single individuals with income above €250,000
• Couples filing jointly with combined income above €500,000

The measure ensures a minimum effective tax rate of 20% on income above these thresholds. Those already paying above 20% will see no change.

For most UK expats in France, this is not relevant. It is most applicable to those with significant investment portfolios or high-value drawdown income.

6. Home Help Tax Credits — Stricter Reporting Required

If you claim the tax credit for home help services — covering cleaners, gardeners, tutors, carers, and similar services — the 2026 declaration introduces a new reporting requirement.

You can no longer simply declare the total amount spent. You must now state:

• The type of provider — whether you are a direct employer, using an agency, or using a service company
• The exact type of service — for each separate expense type

If you use multiple types of home help, each must be reported separately. Review your 2025 receipts and invoices before filing.

7. New Rental Investment Scheme — Relance Logement

The government introduced a new three-year tax scheme for private landlords who rent out qualifying residential property from 2025 onwards.

Qualifying landlords can deduct up to €12,000 per year of the property purchase price from their rental income. Key conditions: unfurnished property, let as the tenant's primary residence, minimum 9-year letting commitment.

This is a niche provision for new investment rather than existing portfolios. If you made a qualifying property investment in 2025, take specific advice before filing.

8. First Crypto Reporting Season Under DAC8

2026 is the first filing season in which EU-based crypto exchanges are automatically transmitting transaction data to the French tax office before your return is filed.

This doesn't create new obligations — crypto gains have always been taxable in France. What it means is that the tax office is cross-referencing your return against data they already hold. Declaring correctly on Form 2086 and Form 3916-bis is more important than ever.

See our guide to Cryptocurrency and French Tax.

9. Mandatory Two-Factor Authentication on Impots.gouv.fr

Logins to the personal tax portal now trigger a mandatory one-time verification code sent to your registered email address.

If your registered email is out of date, you will not be able to log in. Check and update your contact details before filing season closes — via your Espace Particulier on impots.gouv.fr.

10. The Change That Didn't Happen — The 10% Pension Deduction

During the 2025 budget debates, the government proposed replacing the standard 10% deduction on pension income with a flat €2,000 allowance per person.

For many UK expats with moderate pension income, this would have been substantially worse — and for a couple, the combined loss could have run to several hundred euros of additional tax per year. The proposal was ultimately defeated in the final budget vote. The 10% deduction remains completely intact for 2026.³

It is worth knowing this happened. The 10% pension deduction is not permanently guaranteed — it is a policy choice, and it has now been on the table once.

Common Mistakes

1. Applying the new 18.6% social charges rate to pension income. The rise only affects investment income and furnished holiday rental income. Pension income social charges are unchanged — rates still depend on your household income level and S1 status.

2. Not checking the new individual withholding rate situation before filing. If you are in a couple and prefer the old joint household rate, you need to actively opt out during the 2026 declaration.

3. Missing the new micro-BIC ceiling on unclassified holiday lets. If your French holiday rental income exceeded €15,000 in 2025 and you assumed the old rules still applied, your calculation will be wrong.

4. Forgetting the home help provider detail. If you claim home help tax credits, you now need the specific provider type for each service — you cannot just enter a total figure.

5. Assuming the pension allowance was abolished. It wasn't. Some community discussion during the budget debates created confusion. The 10% deduction is intact and applies as normal for 2026.

Frequently Asked Questions

Does the social charges rise affect my UK pension income declared in France?

No. The rise from 17.2% to 18.6% applies to investment income — dividends, interest, capital gains on securities, and non-professional furnished rental income. Pension income social charges are unchanged. Your rate still depends on your household income level and S1 status.

My partner and I have very different incomes. Should we opt out of the individual withholding rate?

The total household tax bill is the same either way. The difference is how the withholding is split between you during the year. If you have joint finances and a single household account, the old system may be simpler — opt out on your declaration.

I use an Airbnb-type rental in France. Do the new micro-BIC rules apply to 2025 income?

Yes. The new €15,000 ceiling and 30% allowance apply from 2025 income onwards — declared in your 2026 return. If your gross rental receipts exceeded €15,000 in 2025, you must use the actual income and expenses method instead.

Is the high earner minimum tax relevant to most UK expats?

For most UK expats in France, no. The €250,000 individual threshold is well above typical expat income levels.

My Impôts login isn't working — I think it's the two-factor authentication change. What do I do?

The new system sends a one-time code to your registered email. If you can't receive it, your registered email is likely out of date. Call the DGFiP helpline (0809 401 401) or visit your local tax office with identification to update your contact details.

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