2025 Budget Changes: Tax Adjustments, Energy Vouchers, and Zero-Interest Loans Under Version 49.3

Prime Minister François Bayrou’s 2025 budget proposal, backed by Article 49.3, focuses on progressive income tax adjustments, maintaining a minimum tax for high-income households, and enhancing accessibility for first-time homebuyers through a zero-interest loan extension. It introduces exemptions for donations aiding home purchases and modifies taxation for furnished rentals. Additionally, changes to the energy voucher program streamline its use, reflecting the government’s commitment to addressing financial challenges while supporting homeownership and energy efficiency.

Key Highlights of the 2025 Budget Proposal

The 2025 budget has become a focal point for Prime Minister François Bayrou, who has taken a bold step by invoking Article 49.3 of the French Constitution. This decision allows his government to assert responsibility before the National Assembly in an attempt to push through the contentious budget. Following a lengthy process that began with former Prime Minister Michel Barnier’s leadership, the future of this budget hinges on the upcoming vote on the motion of censure. With the Socialist Party choosing not to challenge the Bayrou government at this time, the budget is poised for adoption. Below are the significant measures proposed in the 2025 budget that could impact your finances.

Income Tax Adjustments and New Measures

One of the notable changes in the budget is the progressive income tax scale, which has been indexed at 1.8% instead of the anticipated 2%. This adjustment aligns with the annual inflation rate reported by INSEE, which stands at 1.8% for 2024. This indexing aims to prevent an increased tax burden and ensure that approximately 619,000 taxpayers remain non-taxable.

Additionally, the budget maintains the differential contribution on high incomes (CDHR), which imposes a minimum tax of 20% on wealthy households. However, this measure is temporary and is expected to be replaced by new anti-optimization regulations that will ensure that the combined tax burden for the wealthiest does not fall below a specified threshold.

In terms of real estate, the budget allows local authorities to increase transfer duties on property transactions by 0.5 points, although first-time homebuyers will be exempt from this increase. Furthermore, the tax advantage for furnished rental properties will be modified, leading to higher taxation upon resale due to the reintroduction of amortization deductions into capital gains calculations.

Another crucial aspect of the budget is the confirmed extension of the zero-interest loan (PTZ), which aims to expand access to homeownership for first-time buyers across all regions. This initiative is designed to facilitate the purchase or construction of both single-family homes and apartments.

A new proposal included in the budget is the exemption of donation rights for funds intended to assist children or grandchildren in purchasing their primary residence. This measure is expected to encourage financial support from parents and grandparents, allowing cash gifts up to €100,000 to be given without incurring transfer duties.

Lastly, the 2025 budget introduces changes to the energy voucher program, which has faced challenges in the past year. The new provisions limit its use by eliminating the option to convert the energy voucher into a work voucher for energy renovations, thereby streamlining the application of this aid.

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