Goodbye housing tax and goodbye TV levy: the two big news for the year 2023 are permanent disappearances. As for local taxes, the property tax is soaring. Finally, income tax will be subject to many new features and developments in 2023.
Housing tax: total abolition, except…
End. Final. In 2023, the housing tax no longer exists. At least for the main residences. A residence tax on secondary residences and other furnished premises not assigned to the main residence (THRS) remains, and no abolition or change is planned. The housing tax will therefore continue for the owners of 3.5million second homes that counts France.
Housing tax: these households which will continue to pay 700 euros each year
TV license fee: gone
The government has decided to abolish the contribution to public broadcasting from 2022, which Parliament has validated, not without raising doubts and criticisms. As a result, at the start of 2023, unlike last year, no tax household has to pay a monthly TV fee each month, and the famous 0RA box synonymous with television in your home will have disappeared from your tax return. In 2022, if it had been settled, the fee would have been 138 euros.
In the short term, it is a fraction of VAT resources that will compensate the abolition of the fee to finance public broadcasting (France TV, Radio France, Arte, INA, RFI, etc.). Long-term? Thoughts in progress…
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Property tax: expected to soar in 2023
Until now, the family of local taxes was based on two pillars, housing tax and land tax, the main tax resources of local authorities. One disappears, the other remains… and increases. And this without even mentioning the rates voted by the 36,000 French municipalities, or the rates of the departments and intermunicipalities.
The basis for calculating your property taxthe cadastral rental value (VLC), itself increases each year according to one of the inflation indices measured by INSEE, the HICP. But the index in question is 7.1% in November, the month used for the regulatory increase in this calculation basis. Result: unless your city or department decides to lower your rate, the property tax will increase by at least 7.1% in 2023.
Local taxes: the property tax will increase by at least 7.1% in 2023
Income tax: a scale raised at the rate of inflation
The 2023 income tax schedule has been adjusted to keep pace with inflation. All the thresholds of the different brackets of the scale increase by 5.4%. The annual inflation estimate used in the fall by the government ultimately turned out to be very close to reality, since INSEE estimated a 5.3% rise in prices over the year 2022 compared to 2021.
This rise in the bar, is it good or bad news? If your income isn’t growing, that’s good news: your income tax will decrease slightly. For example, for a couple with two children and a little over 2,500 euros net monthly each, the tax savings will be around 180 euros, if and only if their income remains stable.
| Income bracket per tax share | Applicable rate for the tranche |
|---|---|
| Up to 10777 | 0% |
| From 10777 27478 | 11% |
| From 27478 78570 | 30% |
| From 78570 168994 | 41% |
| Over 168994 | 45% |
Barme revalued on the basis of an annual inflation of 5.4%.
Provisional scale, subject to adoption of the finance bill for 2023.
Income tax: how much less will you pay in 2023 thanks to the new scale?
Tax notice: welcome to the marginal tax rate
New in 2023 on your tax notice: your marginal tax rate and your average income tax rate. This measure, demanded by LR deputies via an amendment and integrated into the 2022 amending budget, has an educational aim: Our compatriots often confuse the average tax rate and the marginal rate, explain the deputies.
However, the average rate, very close to your source deduction rate, is effectively the percentage of your income going to the tax authorities. But the marginal rate corresponds to the slice of the scale (see below) that applies to the upper part of your income: a well-off single person declaring 100,000 euros of income thus has an IMR of 41% (the upper slice applies part of his income ) but its average rate is only 22.6%. These two rates will now appear on all notices, from 2023as confirmed by the General Directorate of Public Finance (DGFiP) MoneyVox.
| Marginal rate income tax | Number of households | Average amount per household |
|---|---|---|
| 0% | 13.1million | – 46 |
| 11% | 19.8million | 507 |
| 30% | 6.4million | 6176 |
| 41% | 426000 | 34953 |
| 45% | 63000 | 159873 |
Source: Ministry of Economy, Finance and Recovery – DGFiP
2021 tax statistics on 2020 income
0%, 11%, 30%, 41%… How many French people pay the same rate as you?
Tax credit: up to 600 euros more for parents
To date, childcare expenses for children under 6 taken into account for the tax credit are capped at 2300 euros. From 2023, this ceiling increases to 3,500 euros. Which is far from being a technical adjustment! The maximum tax credit for childcare costs goes from 1,150 euros to 1,750 euros, or 600 euros more. However, parents employing a childminder, for example, easily reach these ceilings. To date, 1.81 million households receive this tax credit, of 620 euros on average.
This tax credit of 620 euros (on average) that thousands of parents forget to claim
Home employment: new beneficiaries of the immediate tax credit
For the past few months, individuals who usually benefit from the home employment tax credit and individual customers of personal service companies have been able to reduce the bill or the salary paid out by two. The tax credit, which you have hitherto been receiving a year off, is now immediate, at least if you agree to switch to the system. Cesu+ or if you complete an online Urssaf form for service providers. The association or the service provider or the Cesu services then take care of the steps to allow you to immediately benefit from the 50% tax credit.
The novelties 2023? Beneficiaries of the personalized autonomy allowance (ABS) and the disability compensation benefit (PCH) can now take advantage of the immediate advance. And the DGFiP will automatically take into account the immediate monthly advance in its calculations: the traditional annual advance of mid-January on tax credits will therefore be reduced by taking into account the advantage so you have already benefited in 2022.
Tax credit: Cesu or service provider, here is the instructions for the immediate advance
Widows of veterans: half a tax share for all ages
This additional tax half-share is currently reserved for widows and widowers over the age of 74 whose deceased husband received the combatant’s pension, awarded to her from the age of 65. The 2023 budget removes the age requirement for the person holding the combat card at the time of their death.
The half-share tax stretched all the widows of veterans
Withholding tax: a more flexible rate reduction
Your income is falling? Until now, to reduce your withholding tax rate, the amount withheld had to be reduced by 10% for the tax authorities to agree to change your rate. In 2023, a 5% drop in the levy will be accepted to modulate your rate.
Why you will be able to reduce your withholding tax more easily in 2023
RTT: no tax on redeemed rest days
Does your employer agree to buy back your 2022 RTTs that you cannot (or want) not ask? They will be paid as overtime, and you will not pay tax in 2023 on this additional income earned in 2022.
Redemption of RTT: the subtleties of the exceptional payment for rest days 2022
Land deficit: a raised threshold for energy strainers
Do you have work to do in the accommodation you rent? If the cost of the work undertaken is higher than the rents you receive, you create a land deficit, since your land income goes into negative. This land deficit can be deducted from your overall income. In other words, this land deficit will allow you to reduce your income tax by reducing your taxable income.
Normally, you can charge up to 10,700 euros per year via this device. From January 2023 until December 2025, following the vote on a measure in the amending budget, you can deduct up to 21400euros if you are doing major work in an energy sieve. Thus, your energy renovation work expenses will have to allow you to switch a dwelling rated E, F or G into category A, B, C or D.
Thermal sieve: the land deficit doubled for energy renovation work
And also: extended tax exemption, device removed…
IR-SME reduction. The so-called Malraux tax reduction, which applies to direct investments in SMEs or via FIPs or FCPIs, is usually 18% but it will once again be increased to 25% in 2023.
Retirement savings ceiling. The maximum deduction limit for your payments to a retirement savings plan remains stable at 32,909 euros.
Censi Bouvard. This rental investment tax reduction, which existed for more than ten years, ended on December 31, 2022.
press tax credit. Have you reimbursed 30% of a first press subscription? It was possible until the end of 2022, it will no longer be possible in 2023.
Tax on vacant dwellings. It rises to 17% in the first year and 34% in the second, against 12.5% and 25% respectively to date.
Development tax. The rate used to calculate the tax for the construction of a swimming pool will increase from 200 to 250 euros per m2.