November is here, the temperatures have dropped and it is cold and rainy outside. So here is some good financial news to warm you up!
Financial update France
By Katriona Murray-Platon
This article is published on: 7th November 2023
Since the 1st January 2023, Taxe d’habitation no longer applies to the main residence. Now it is only those with a second home who have to pay taxe d’habitation on their second property. The tax statements should be on your online account on the impots.gouv.fr website in November. You have until 15th December to pay this tax.
In France, one out of ten houses are considered to be second homes by the tax office. These properties are mainly to be found on the coast (40%) or in the mountains (16%) with the remainder being mainly in the larger towns and cities (12%). These properties are usually smaller than the main home with a quarter of them being less than 40 m².
Contrary to what some newspapers would have you believe, any taxes on second homes largely affect French owners and not foreigners, since only one out of ten second homes are owned by a person living outside France. Among those owned by French residents, two out of three properties are owned by people over 60. This figure increases to three out of four along the coast. 34% of properties are owned by higher income households. https://www.insee.fr/fr/statistiques/5416748.
Make sure that you check your Taxe Foncière statement that you received in October as there could be a mistake on it. According to the French tax office approximately 1.87 billion euros have been overpaid just in 2023 because of mistakes made by the tax office.
The draft finance law has been making its way through parliament. Article 2 of the draft finance law for 2024 has increased the tax brackets by 4.8%. The new proposed tax brackets are as follows:
| Income | Tax rate |
|---|---|
| Up to €11,294 | 0% |
| From €11,294 to €28,797 | 11% |
| From €28,797 to €82,341 | 30% |
| From €82,341 to €177,106 | 41% |
| Over €177,106 | 45% |
If you are in receipt of a French pension through Agirc-Arrco, the additional pension (complémentaire) will increase by 4.9% in November. It increased last November by 5.12%. The French State pension will also increase by 5.2% from 1st January 2024.
If you haven’t already looked into carrying out work on your house to improve your heating or energy efficiency, now may be the time as the amount of the bonus (MaPrimeRenov) has increased on average by €4300.
The maximum amount that you can put into a LEP savings account has increased since 1st October from €7700 to €10,000. The interest rate on this amount remains at 6%. To be eligible to have a LEP, your taxable income (revenue fiscal de reference) for 2022 as stated on your tax return received in Autumn 2023 must be less than €21,393 for a single person, or €32,818 for a couple.
The 30th November is the date by which you must inform your bank if your taxable income (revenu fiscal de reference) in 2021 was less than €25,000 as a single person or €50,000 as a couple, so that they don’t automatically take the 12.8% tax from the interest on your savings in 2024. If you receive dividends, the income thresholds are higher, €50,000 for a single person and €75,000 for a couple. This is particularly important if your income is not taxable or in the 11% tax bracket. These thresholds remain the same as previous years and have not increased with inflation.
November is the month when you can see the most beautiful autumn colours around France. It is also a great time to review your finances and make plans for the year ahead. If you have any questions on the above or any other matters, please do get in touch!