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What the 2022 French budget means for your finances

An income tax freeze and cuts to household taxes are in France's 2022 budget.
The French government has chosen not to raise taxes in its latest budget. Photo: PHILIPPE HUGUEN / AFP.
The French government has now presented it's 2022 Budget - intended to kickstart the economy after the pandemic and lockdown, here's how the changes will affect your finances.

When Finance Minister Bruno Le Maire presented the government’s final budget before the upcoming presidential and legislative elections on September 22nd, it made headlines for its significant spending promises. Denounced by critics as irresponsible, and defended by the government as a means to stimulate the post-Covid economy, the budget quickly became a political football.

But on a practical level, the budget included several announcements that could have an impact on people’s daily lives.

Changes to income tax thresholds

The government has chosen to favour growth over tax rises as the means of coming out of the Covid economic crisis, meaning the 2022 budget features no new tax rises. As well as reducing corporation taxes to 25 percent for all businesses, the government is also changing what employees have to pay.

As a direct response to inflation, income tax thresholds will be raised by 1.4 percent for money earned in 2021 (which need to be declared on the annual tax declaration in 2022). That means you will start to pay income tax on earnings above €10,225, compared to €10,084 previously. These are the new thresholds:

  • Income up to €10,225: 0 percent
  • €10,225 to €26,070: 11 percent
  • €26,070 to €74,545: 30 percent
  • €74,545 to €160,336: 41 percent
  • Income above €160,336: 45 percent

Household tax exemption

France has already abolished the taxe d’habitation (household tax) for 80 percent of households. Now, the government is progressively getting rid of this tax for the highest earners. The amount they pay has already fallen by 30 percent this year, and they will benefit from a 65 percent reduction in 2022, before the measure is finally scrapped in 2023.

This only applies to primary residences only – second home owners will still have to pay the full rate, and in some cases even more.

Energy renovation

If you are thinking about undertaking work to make your property more energy efficient, there was good news in the budget, because it allocated funds for extending the MaPrimeRénov’ scheme into 2022.

The scheme, launched in January 2020, offers grants of up to €20,000, and all homeowners are now eligible, including for second homes. The government is aiming to help 800,000 households make their homes greener and more energy efficient in 2021.

EXPLAINED: How to access France’s €20k property renovation grants

Changes to the Disabled adults’ allowance

The way the Disabled adults’ allowance is calculated is set to change for beneficiaries who are living with a partner, with the introduction of a fixed €5,000 deduction on the income of the partner who does not receive the allowance.

A further €1,100 deduction will apply for each child. From January, this will replace the 20 percent deduction currently in place, which meant that 80 percent of the partner’s income was taken into consideration when calculating the disability allowance. The government estimates the change will provide an additional €110 per month on average for 120,000 recipients. You can find out more about the allowance here.

Youth sports

In August 2021, ahead of the new school year, the government launched the pass’sport, a scheme designed to facilitate access to sports for young people. Children aged 6 to 18 whose families received the back-to-school allowance or the allowance for children with disabilities were eligible for a €50 grant towards the cost of registration in a sports club. The scheme has been extended for 2022.

READ ALSO France to limit price hikes on gas and electricity

Student grants

Students who receive a bourse – a grant for students from low-income households – will see a 1 percent increase to the amount they receive for the academic year which has just begun. The budget also allocates funds for university canteens to continue providing €1 meals to students who are eligible for the grant.

Aid for hiring apprentices

The government has also announced that the aide exceptionnelle à l’alternance (one-off apprenticeship aid) has been extended until June 2022 for those under 30. The scheme provides businesses with a payment of between €5,000 and €8,000 for hiring an apprentice or a young person on a professional training contract.

National service

Emmanuel Macron made it a campaign promise when running for president in 2017, and now it is set to be expanded. 50,000 young people aged between 15 and 17 will take part in Service national universel (universal national service) in 2022.

A further 200,000 places are available for young people who want to undertake service civique (civic service), state-funded volunteer opportunities lasting between 6 and 12 months for those aged 16 to 25.


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