French Finance Law 2026: New Tax Measures for Individuals

Law n° 2026-103 of 19 February 2026, validated by the Constitutional Council (decision n° 2026-901 DC), brings together a set of measures that directly affect individuals, property owners, and business owners in their private sphere. Several of these measures open precise time windows: overlooking them means missing opportunities that will not recur for years — or possibly never.

This article covers exclusively the measures affecting individuals and the private wealth sphere of business owner-managers: income tax (impôt sur le revenu, IR), family gifts, energy renovation, a new rental investment scheme, and patrimonial taxes. Measures specific to businesses — corporate income tax (IS), the business value-added contribution (CVAE), the young innovative company (JEI) regime, and mandatory e-invoicing — are covered in dedicated articles in our LF 2026 cluster, linked at the end of this page.

The Finance Law 2026 contains four major measures for individuals: a +0.9% upward revision of the IR bands on 2025 income, an extension of the tax-exempt family gift scheme until 31 December 2026 (€100,000 ceiling per donor), a tightened timeline for MaPrimeRénov' before the January 2027 restructuring, and the creation of a new collective new-build rental investment scheme called Relance logement.

The 2026 Finance Law sits within a context of fiscal consolidation, but it preserves several mechanisms favourable to individuals that were introduced in 2024–2025 — while tightening certain schemes from 2027 onwards. The calendar is therefore decisive: some doors close on 31 December 2026, others on 1 September or 1 January 2027.

These four measures do not target the same profiles. The band revaluation concerns everyone. The family gift scheme and the MaPrimeRénov' single-measure track both require action before year-end. The Relance logement scheme requires waiting for the implementing regulations still to come.

Article 4 of the Finance Law 2026 revises the IR bands upward by +0.9%, in line with the reference inflation rate. These new thresholds apply to income received in 2025 and declared in spring 2026. This is the second consecutive Finance Law to apply this type of retrospective indexation.

Associated ceilings move in the same direction: the family quotient (quotient familial) half-share ceiling rises to €1,807 (from €1,791), the single-parent ceiling to €4,262 (from €4,224). The individual low-income rebate (décote) is raised to €1,982, and the couple rebate to €3,277.

For a single taxpayer whose income falls in the 30% band, the revaluation produces a modest reduction in effective tax: in the region of €50 for income just above the lower band threshold, rising to approximately €280 for income near the upper threshold of that band. This is not a structural reform — it is protection against "inflation tax" that would otherwise have increased the bill in nominal terms. If you are anticipating a rise in 2025 income — a securities disposal, a supplementary remuneration, an exceptional dividend — these new thresholds will marginally affect your calculations.

The legal framework#

Article 790 A bis of the Code général des impôts (CGI), introduced by the law of 14 February 2025, opens a temporary exemption from French gift tax (droits de mutation à titre gratuit) for family cash gifts earmarked for housing purchase or energy renovation. This window runs from 15 February 2025 to 31 December 2026. Beyond that date, the scheme is not renewed under the current text.

Amounts, eligible recipients and conditions of use#

Each donor may make a tax-exempt gift of up to €100,000 per recipient. A single recipient can receive up to €300,000 by combining gifts from several donors. Eligible recipients are the donor's children, grandchildren, and great-grandchildren; in the absence of direct descendants, nephews and nieces qualify.

The earmarking condition is strict: funds must be deployed within six months of the gift for one of two purposes:

• Purchase of a new-build or off-plan property (vente en l'état futur d'achèvement, VEFA) intended as the recipient's principal residence
• Energy renovation works in the recipient's principal residence

Failure to meet the six-month deadline or the earmarking condition triggers reassessment of the exemption and imposition of applicable gift tax. The gift must be declared to the tax authorities under the standard procedures.

Stacking with other allowances#

This scheme is stackable with:

• The €31,865 manual gift allowance (art. 790 G CGI), refreshed every 15 years
• The €100,000 parent-to-child allowance (art. 779 CGI), refreshed every 15 years

However, the tax-exempt gift cannot fund the same expenditure as a tax credit or public subsidy (MaPrimeRénov', ANAH grant) — the non-cumulation rule applies for the same works.

A worked example#

A couple wishes to help their only child purchase a new-build principal residence. Here is what can be transmitted with no gift tax whatsoever:

Total transmissible free of gift tax: €463,730 — provided the standard allowances have not been used in the preceding 15 years. If grandparents also contribute via art. 790 A bis (€100,000 per donor, grandchildren being explicitly eligible), the consolidated amount can exceed €600,000.

In our client files, this scheme is used most frequently by owner-managers who hold a patrimonial holding structure and are organising a partial transmission around a property project for their children — combining the temporary family gift with a longer-planned classical donation.

Points to watch in 2026: work backwards from 31 December 2026 with the six-month earmarking period in mind. A gift made in October 2026 requires the funds to be deployed before the end of April 2027 — but the gift itself must be formalised before the scheme closes. Have a notarial deed or a duly registered manual gift declaration drawn up, and retain all allocation evidence (purchase deed, works invoices).

The MaPrimeRénov' calendar for 2026–2027 is among the most technically demanding to track for property owners. The changes are spread across four key dates:

1. From 1 January 2026 — effective removals

• End of grants for external and internal wall insulation under the single-measure track (parcours par geste)
• End of grants for biomass boilers under the same single-measure track

2. Until 31 December 2026 — what remains accessible

• Single-measure track (parcours par geste) extended for F- or G-rated houses
• Full DPE (energy performance certificate) not yet mandatory for 2026: an energy class attestation suffices (a full DPE will be compulsory from 2027)
• Comprehensive renovation programme (parcours accompagné) restricted to E, F, and G-rated properties; C and D-rated properties are now excluded

3. From 1 September 2026 — new threshold

• No deep renovation grant (rénovation d'ampleur) where a gas heating system is retained after the works

4. From 1 January 2027 — full restructuring

• End of the single-measure track for all properties
• Full DPE mandatory for every grant application
• All applications must pass through the comprehensive renovation programme (rénovation d'ampleur)

For property owners considering individual measures — heat pumps, ventilation, loft insulation — the window closes on 31 December 2026. From that date, accessing grants will require a comprehensive renovation project, which is more demanding and more expensive to assemble.

Our reading: the MaPrimeRénov' files most frequently blocked in 2025 were those where the owner had combined a grant for the same works with a tax-exempt family gift under art. 790 A bis. The non-cumulation rule is often overlooked and leads to after-the-fact reassessments. If you received a family gift earmarked for renovation, confirm precisely which expenditure is charged to which scheme before submitting your MaPrimeRénov' application.

Relance logement: new rental investment mechanism#

The LF 2026 creates a rental investment scheme targeting new-build collective residential properties. The commitment period is nine years of letting as a principal residence. The precise terms — including rent ceilings, eligible zones, and rates of tax reduction — are subject to implementing decrees whose publication is still awaited. At this stage, the scheme represents a potential avenue for wealth diversification for owner-managers with investable capital, but it would be premature to commit before the full implementing regulations are published.

Tax on patrimonial holding companies and luxury assets#

The Finance Law 2026 (Law n° 2026-103 of 19 February 2026, art. 235 ter C CGI) introduces a tax on patrimonial holding companies: 20% of the fair market value of assets not allocated to an operating activity (yachts, aircraft, non-professional vehicles, jewellery and precious metals, racehorses, wines and spirits, residential properties the manager reserves for personal use). It targets only IS-liable companies meeting three cumulative conditions: total assets of at least €5M, at least 50% of the rights held by a natural person, and passive income exceeding 50% of total revenues; it applies to fiscal years closing on or after 31 December 2026. If you hold this type of asset inside a holding or patrimonial structure, a review with your chartered accountant (expert-comptable) and tax adviser is essential to assess the impact and available structuring options.

Levy on small parcels from outside the EU#

A charge of €2 per article imported from outside the European Union is introduced to restore a more level playing field for e-commerce operators. This measure directly affects regular consumers of direct-import platforms and, to a lesser extent, certain trading structures that source goods outside the EU.

Donations to charities: ceiling raised to €2,000#

A measure predating the LF 2026 but fully applicable in 2026: since 14 October 2025, the 75% income tax reduction rate applies to donations up to €2,000 to organisations assisting people in need (previously €1,000). For a taxpayer in the 41% band, the tax benefit can reach €1,500 on a €2,000 donation — an arbitrage to factor into your year-end giving strategy.

The Finance Law 2026 also contains significant provisions for businesses, which we have deliberately excluded from this article to avoid conflating them with the private wealth measures. Our detailed analysis is available in the following articles:

• SME measures (reduced IS rate, CVAE, JEI regime, e-invoicing): Finance Law 2026: key measures for SMEs
• Corporate and owner-manager measures (remuneration, dividends, structuring): New tax measures 2026 for companies and their managers
• Flat tax / prélèvement forfaitaire unique (PFU): Senate blocks the flat-tax increase: what changes
• E-invoicing (obligations and deadlines): Mandatory e-invoicing 2026: obligations and timelines

On the VAT small-business exemption (franchise en base de TVA): the proposal to lower the threshold to €25,000 was definitively abandoned by Law n° 2025-1044 of 3 November 2025. The thresholds applicable in 2026 remain at €85,000 for sales and accommodation activities, and €37,500 for services.

Faced with the density of a Finance Law, the real risk is not ignorance across the board — it is failing to distinguish what applies to your specific situation from what does not. Here is the method we apply in our personal and fiscal situation reviews:

1. Identify the measures that affect your actual situation IR bands, family gifts, energy renovation, rental investment: each scheme has its own entry conditions. A property owner with a C-rated house has no access to the MaPrimeRénov' single-measure track. An owner-manager who recently used up standard gift allowances needs a different approach to family gifts.

2. Identify the time windows 31 December 2026 concentrates two major deadlines: the end of the tax-exempt family gift scheme and the end of the MaPrimeRénov' single-measure track. A decision made in October 2026 is worth far more than the same decision made in January 2027.

3. Verify the precise conditions before acting The non-cumulation of grants, the six-month earmarking period for family gifts, the eligibility conditions for the comprehensive renovation programme: these details are precisely what distinguishes a successful application from one that is refused or challenged at audit.

4. Plan the administrative steps in advance Declaring a manual gift, assembling a MaPrimeRénov' file, registering a deed: each of these steps has its own lead times. A MaPrimeRénov' application filed in November with works planned for December leaves very little margin. Plan two to three months ahead.

5. Document for fiscal audit-proofing The French tax authorities can audit gifts and tax credits within a three-year window. Fund allocation evidence, works invoices with the required statutory information, attestation from a certified RGE contractor: every document matters. In our client files, reassessments relating to MaPrimeRénov' and family gifts almost invariably concern missing documents, not the legitimacy of the scheme itself.

A client owner-manager who wished to help his children acquire their principal residence was able to combine, in 2026, a family gift of €200,000 (€100,000 per parent) with the standard parent-child allowance to finance a new-build acquisition — with no gift tax and in full compliance with every earmarking condition. In that case, planning ahead represented a substantial tax saving that would have been impossible without preparation.

Up to date as of 26 May 2026. This article is for information purposes only and does not replace personalised professional advice. For your specific situation, please consult a chartered accountant (expert-comptable) registered with the Ordre des experts-comptables.