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.

The French 2026 budget was passed on 19 February 2026 after a prolonged period of political deadlock, with the government ultimately invoking constitutional powers to push it through. The result, for most individual taxpayers, is a relatively modest package of changes — but some of them matter significantly for UK expats, particularly those with investment income, holiday rental properties, or pension income.

This article covers every change relevant to UK expats filing their 2026 return. For a full overview of how the French tax system works, see How the French Tax System Works: A Plain-English Overview for UK Expats.

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 part of your household. A married or PACS couple with no dependants has 2 parts, so the thresholds effectively double before rates are applied.¹

2. Social Charges Rise on Investment Income

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

The CSG (Contribution Sociale Généralisée) element of social charges increased from 9.2% to 10.6% on capital income from 1 January 2026. This takes the total social charges rate on investment income from 17.2% to 18.6% — and pushes the PFU (flat tax) from 30% to 31.4%.²

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 (LMNP/holiday lets)

What this does NOT affect:

• Pension income (social charges on pensions are unchanged)
• Unfurnished rental income (revenus fonciers)
• Capital gains on the sale of real estate
• Assurance vie income and gains
• Income from French tax-advantaged savings accounts (PEL, PEP, CEL)²

Simple rule: If it comes from paper, financial markets, or furnished rentals, it's 18.6%. If it comes from brick-and-mortar unfurnished land, pensions, or Assurance Vie, it stays at 17.2% (or lower for certain pensions).

For S1 holders, the solidarity tax (prélèvement de solidarité) at 7.5% applies instead of the full social charges rate — and this element is unchanged.

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

3. New Default Withholding Rate for Couples (Taux Individualisé)

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

Previously, both partners in a couple had the same withholding rate applied to their income — a single household rate calculated on joint earnings. From September 2025, the default is now the taux individualisé — each partner is taxed at a rate calculated on their own income rather than the household total.³

What this means in practice:

• The higher earner will have a higher withholding rate applied to 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 option contraire on your 2026 declaration. Look for the option "option contraire de leur part dans les déclarations de revenus" when filing.³

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 — Micro-BIC Regime Tightened

If you rent out a property in France as a holiday let, the micro-BIC regime 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
• Allowance reduced from 50% to 30%

Star-rated holiday lets and chambres d'hôtes:

• Annual ceiling: €77,700
• Allowance: 50% (reduced from 71% for classified lets)

If your French holiday rental income exceeds the new €15,000 ceiling, or if the simplified 30% allowance no longer covers your actual expenses, you may need to move to the régime réel — declaring actual income and deducting actual expenses. This requires more record-keeping but often produces a better tax outcome for properties with significant running costs.

Note: Standard non-professional furnished holiday rental income (LMNP) remains at the standard 17.2% social charges rate — it is completely excluded from the new 18.6% investment income hike.

5. High Earner Minimum Tax — Made Permanent

A minimum tax contribution (contribution différentielle sur les hauts revenus, CDHR) 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.¹

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% effective rate will see no change. Some taper relief applies for income just above the threshold, and certain types of exceptional income may be treated differently.

If you were affected in 2025, the majority of the additional tax should already have been paid upfront. Your 2026 declaration will calculate the final amount and any adjustment will follow.

6. Service à la Personne — Stricter Reporting Required

If you claim the tax credit for home help services (crédit d'impôt pour emploi d'un salarié à domicile) — 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 explicitly state:

• The nature of the provider — whether you are a direct employer, using a mandate agency, or using a service provider company
• The exact modality — the specific type of organisation or employment structure used for each separate service code or expense type

If you use multiple types of home help services, each must be reported separately with its own provider type and modality. Review your 2025 receipts and invoices before filing — you will need this detail to hand when completing the relevant section.

7. Relance Logement — New Rental Investment Scheme

The government introduced a new three-year tax scheme called Relance Logement for private landlords who rent out qualifying residential property. This applies to investments made from 2025 onwards.[^4]

To qualify, landlords must rent out unfurnished property or heavily renovated collective residential buildings as a primary residence for tenants, for a minimum of 9 years.

Qualifying landlords can deduct up to €12,000 per year of the property purchase price directly from their rental income, in addition to standard rental expense deductions of up to €10,700.

This is a niche provision — it applies to specific types of new investment rather than existing rental portfolios — but if you have made a qualifying property investment in 2025, it is worth discussing with a tax adviser before filing.

8. DAC8 — First Crypto Reporting Season

2026 is the first filing season in which the DAC8 directive is fully operational. EU-based crypto exchanges and asset service providers are now automatically transmitting transaction data to the DGFiP 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 DGFiP is cross-referencing your return against data they already hold. Declaring correctly on Form 2086 and Form 3916-bis is more important than ever.

For the full picture on crypto declarations, see our guide to Cryptocurrency and French Tax: What UK Expats Need to Know.

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

A practical change rather than a tax change — but one that catches people out when filing season is busy. The DGFiP has overhauled the security of the private user portal, and logins now trigger a mandatory one-time verification code sent to your registered email address.

If your email address registered with Impôts is out of date, or you no longer have access to it, 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 Allowance

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

For many UK expats with moderate pension income, a flat €2,000 allowance would have been substantially worse than the current 10% deduction — and for a couple, the combined loss could have run to several hundred euros of additional tax per year. The proposal attracted significant opposition and was ultimately defeated in the final budget vote. The 10% deduction remains completely intact for 2026.¹

It is worth knowing this happened, because it may resurface in future budget discussions. The 10% pension deduction is not guaranteed permanently — 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 CSG rise only affects investment income and non-professional furnished rental income. Pension income social charges are unchanged — rates still depend on your RFR band and S1 status.

2. Not checking the taux individualisé 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. The individualisé rate is now the default.

3. Missing the new micro-BIC ceiling on unclassified holiday lets. If your French holiday rental income was above €15,000 in 2025 and you assumed the old 50% allowance still applied, your calculation will be wrong. Check which regime applies to your property.

4. Forgetting the Service à la Personne provider detail. If you claim home help tax credits, the new reporting requirement means you need the specific provider type and modality 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 CSG rise affect my UK pension income declared in France?

No. The CSG increase from 9.2% to 10.6% applies to capital income — dividends, interest, and capital gains on securities, plus non-professional furnished rental income. Pension income social charges are unchanged. Your rate still depends on your RFR band and S1 status.

My wife and I have very different income levels. Should we opt out of the taux individualisé?

The total household tax bill is the same either way. The difference is how the withholding is split between you during the year. The individualisé rate means the higher earner's employer withholds more and the lower earner's withholds less. If you have joint finances and a single household account, the old system may be simpler — opt out via the option contraire on your declaration.

The Relance Logement scheme sounds relevant to me. How do I know if I qualify?

The key requirements are: unfurnished property or heavily renovated collective residential buildings; let as a primary residence for the tenant; minimum 9-year letting commitment; investment made from 2025 onwards. If you think you qualify, take specific advice before filing — the scheme is new and the exact documentation requirements are still being clarified by the DGFiP.

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 cannot use the micro-BIC regime and must use the régime réel instead.

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

For most UK expats in France, no. The €250,000 individual threshold and €500,000 couple threshold are well above typical expat income levels. It is most relevant to UK expats with significant investment portfolios, high-value drawdown income, or business income in France.

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 address. If you can't receive the code, it is likely your registered email is out of date. Call the DGFiP helpline (0809 401 401) or visit your local tax office (Service des Impôts des Particuliers) with your identification to update your contact details and regain access.

References

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