With the enactment of the 2025 Finance Act on 15th February, the French government has implemented a series of robust measures aimed at revitalising the housing and construction sector. The initiatives are designed to encourage home ownership, enable the transfer of wealth and safeguard first-time buyers.
France’s 2025 Finance Act seeks to correct public finances by €50 billion and reduce the public deficit to 5.4% of GDP within the year. To achieve this, the government is introducing spending cuts and imposing exceptional taxes on the wealthiest individuals and largest corporations.
Among the most significant reforms are those pertaining to property and construction, including the expansion of the Zero Rate Loan (PTZ). From 1st April, banks will be able to offer PTZ loans to first-time buyers across the country, irrespective of location, for the purchase of new properties, whether individual or collective. For existing properties, the PTZ scheme remains unchanged, allowing eligible households in designated areas to benefit from financial assistance on the condition that they undertake energy renovation work.
Another key point is the exemption on financial gifts of up to €300,000. Parents and grandparents will be permitted to transfer up to €100,000 each to a child or grandchild, up to a maximum of €300,000 per beneficiary toward buying a home. This initiative can be used for both primary residences and long-term rental purposes.
Additionally, the government is acting to shield first-time buyers from rising notary fees. While departmental councils will have the authority to raise transfer taxes (DMTO) to fund social policies, first-time buyers will be exempt from these potential increases. This move is aimed at easing the path to home ownership for new purchasers.
Beyond the housing sector, the 2025 Finance Act introduces several fiscal and environmental policies impacting individuals. These include a differential contribution on the highest incomes (CDHR) and an increase in the ecotax, which strengthens CO2 and weight penalties on polluting vehicles. Furthermore, the reduced VAT rate on the purchase and installation of gas boilers is being abolished, while the solidarity tax on airline tickets (TSBA), commonly referred to as the ‘Chirac tax’, is set to rise, albeit to a lesser extent than initially planned.
In an effort to offset the impact of inflation, the Finance Act also indexes the income tax scale to inflation at a rate of 1.8%, thereby ensuring that household taxation levels remain stable despite economic fluctuations.
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