Personal taxation: what should change in 2025?
- Apr 2
- 3 min read
A changing finance law š The future finance law, if adopted, will bring about several important tax adjustments for individuals.
A changing finance law š
The proposed finance bill, if adopted, will bring about several significant tax adjustments for individuals. These changes aim to adapt to inflation, strengthen tax fairness, and simplify some of the system's complex rules.
Income tax scale adjustment š
New Tax Scale
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The tax brackets would be increased by 2%, in line with projected inflation. This would limit the tax increase linked to wage growth, a phenomenon known as "cold progression".
Creation of a "tax safety net" for high earners š°
A minimum tax of 20% would be introduced for taxpayers earning more than ā¬250,000 (individual) or ā¬500,000 (couple). Additional contributions would apply to incomes exceeding ā¬330,000 or ā¬660,000, depending on family circumstances.
Redefining tax residence š
Following a ruling by the Council of State, the definition of tax residence will change to exclude certain non-residents, taking into account international tax treaties. This measure aims to prevent tax avoidance abuses.
Extension of a tax break for retired executives š
The fixed allowance of ā¬500,000 on capital gains realized by retiring executives would be extended until the end of 2031, offering more visibility to those planning to sell their business.
Reform of BSPCE taxation š
Gains related to Business Founders' Share Subscription Warrants (BSPCE) would be subject to separate taxation for exercise gains and capital gains on disposal. They would no longer be eligible for PEA (equity savings plan) or employee savings plans.
Reintegration of depreciation for furnished rental owners š”
From 2025 onwards, depreciation deducted by landlords of furnished properties will be reintegrated into the calculation of capital gains when the property is sold, thus increasing the taxable base.
End of reduced VAT rates on certain renovations š ļø
Energy renovation work involving fossil fuel boilers would no longer benefit from reduced VAT rates. It would be subject to the standard rate if carried out on dwellings older than two years.
A rapidly changing monetary and political environment š
ECB: heading for a third rate cut this year š
The European Central Bank (ECB) appears poised to announce another interest rate cut at its meeting this Thursday. Inflationary pressures have eased more quickly than expected, and some observers believe that recent inflation may have been due to transitory factors and overly restrictive monetary policies.
This monetary dynamic could support consumption and revitalize the European economy, although the effect on real purchasing power remains to be confirmed.
In the United States: the return of the "Trump trade" šŗšø
The approach of the 2024 presidential election is reviving interest in US stocks associated with Donald Trump. The strategic choice of JD Vance as his running mate and the public endorsement of Elon Musk are contributing to this renewed interest.
US stock indices are hitting record highs: the S&P 500 is above 5,630 points , and the Russell 2000 is experiencing its best four-day performance since 2020. Investors are betting on a possible return of Trump and his pro-business economic program.
However, it is worth remembering that during his previous term, the markets also experienced periods of high volatility, particularly due to trade tensions with China.
Election year: a historically favorable environment š
Statistically, election years are often favorable for stock markets, except in the event of a major recession. The S&P 500 has generally performed well during these periods, largely due to stimulus policies implemented to appeal to voters.
Conclusion: A framework to watch closely š
Between tax adjustments in France, a monetary shift in Europe, and renewed confidence in the United States, 2025 is shaping up to be a year of transition. Savers will need to pay close attention to these developments to adapt their wealth management strategies.
At Evvest , we continuously analyze the impact of these changes on your savings and investments, to support you in your decisions with clarity, pragmatism and anticipation.
