France has entered 2026 in a state of rare constitutional limbo. For the first time in decades, the French Parliament failed to adopt a full Finance Bill (PLF) by the start of the year. In its place, the government has invoked Law n° 2025-1316—known as the Loi Spéciale—to keep the lights on. For U.S. citizens living in France, this isn't just a political curiosity; it creates a "fiscal freeze" that impacts everything from your annual income tax to the profitability of your rental property.
What is the 'Loi Spéciale'?
Under Article 47 of the Constitution, this emergency measure allows the government to collect existing taxes and pay civil servants without an approved budget. However, it cannot introduce new reforms or—crucially—adjust tax brackets for inflation.
📉 The 'Stealth Tax': Frozen 2026 Tax Brackets
In a normal year, the French government re-indexes income tax brackets to match inflation (typically around 2%). Because the 2026 budget is stalled, this indexation has been suspended. This creates a phenomenon known as "fiscal drag." If your U.S. pension or salary increased with inflation, but the tax brackets stayed the same, you are effectively pushed into a higher tax rate.
| Marginal Tax Rate | Taxable Income (Per "Part") | Status |
|---|---|---|
| 0% | Up to €11,294 | Frozen at 2025 levels |
| 11% | €11,295 to €28,797 | Frozen at 2025 levels |
| 30% | €28,798 to €82,341 | Frozen at 2025 levels |
| 41% | €82,342 to €177,106 | Frozen at 2025 levels |
| 45% | Above €177,106 | Frozen at 2025 levels |
The Real-World Cost
For a typical high-income U.S. household (earning €150k), the failure to index these brackets results in an extra €270 to €500 in taxes for 2026. While not a dealbreaker, it represents a loss of purchasing power in an already inflationary environment.
🏠 LMNP vs. LMP: The Reform That Wasn't
If you own a furnished rental property in France, the distinction between Loueur en Meublé Non Professionnel (LMNP) and Loueur en Meublé Professionnel (LMP) is vital. Transitioning to LMP status usually means higher social charges and a less favorable capital gains tax regime.
The 'Article 155' Asymmetry Problem
Currently, you are reclassified as an LMP if your rental income exceeds both €23,000 and your other "French professional income." For U.S. expats, the French tax office often ignores U.S.-sourced income in this calculation, meaning even a high-earning American could be forced into LMP status because their "French" professional income is technically zero.
Suspended Reform
The 2026 fix that would have allowed U.S. income to count toward the threshold was rejected alongside the Finance Bill. The unfair "asymmetry" remains in place for 2026.
Active Reform (Loi Le Meur)
A separate law targeting Airbnbs did pass. If you rent a non-classified tourist rental, your micro-BIC allowance has dropped from 50% to 30%.
For more details on managing property, see our guide on The 2026 French Property & Tax Pivot.
🏥 The Survivor: New Healthcare Fees for 'Visitors'
While the main budget (PLF) failed, the Social Security Financing Bill (PLFSS 2026) was successfully adopted. This is critical for U.S. retirees because it introduces a new mandatory healthcare contribution for holders of the "Visitor" visa.
💰 New PUMa Contribution Structure
Who pays?
Non-working residents (Visitors) who have been in France for more than 3 months.
The Threshold
If your passive income (dividends, interest, etc.) exceeds ~€23,000, you are liable for the CSM fee.
The 2026 Change
A specific surcharge has been added for non-EU citizens on long-stay visas to "harmonize" their contribution with French taxpayers.
Learn more about these specific costs in our deep dive: The 2026 French Healthcare Fee Guide.
🛠️ Action Plan for US Expats
In our experience helping clients navigate these stalemates, the best approach is proactive documentation. Here is what you should do before the Spring filing season:
- ✓Review LMNP Status: If your rental income is near €23,000, keep receipts for all renovations. Under the Régime Réel, these can offset the higher taxes caused by the failed reform.
- ✓Prepare for PUMa: Ensure your U.S. health coverage (if applicable) is documented, though under the PLFSS 2026, the French fee is increasingly difficult to waive for retirees.
- ✓Check Visa Fees: Good news—the proposed €50–€100 hike in residency permit fees was suspended by the Loi Spéciale. Renewal costs remain at 2025 levels for now.
🎯 Key Takeaways
- •Loi Spéciale: A budget freeze that keeps 2025 tax rates but ignores 2026 inflation.
- •Income Tax: Expect a slightly higher tax bill due to the non-indexed brackets.
- •LMNP: The "Article 155" trap persists; US income still might not protect you from LMP status.
- •Healthcare: The PLFSS passed, meaning new 2026 fees for Visitor visa holders are moving forward.
Need Expert Help With Your Move to France?
Blue Door France specializes in helping Americans navigate the complexities of relocating to France. From visa applications to settling in, we provide personalized guidance every step of the way.
Schedule a Free Consultation →