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Price hikes: How life in France will get a little more expensive in 2018

A new year means new prices, so life in France is going to get a little more expensive in 2018. Here are the fee changes to look out for, and what they mean for your wallet.

Published: 2 January 2018 14:29 CET
Price hikes: How life in France will get a little more expensive in 2018
File photo: Denis Charlet/AFP

Stamps

Fans of snail mail can expect a hefty price increase on stamps, after an already significant price raise in 2017.

Red stamps, used for the one-day ‘prioritaire’ service will see an almost 12 percent increase from 85 to 95 cents, having already risen by 5 cents last year, while the green stamp, for letters usually delivered within two days, will go up from 73 to 80 cents. The Ecopli service, for letters under 250 grams, remains the cheapest but stamps will now cost 78 cents, up from 71.

For green and red stamps, the two pricier domestic options, customers can get a three-cent discount by buying them online.

Gas

Almost every month, gas prices in France see a change, and January 2018 is no exception, with the fees from the main provider Engie on the rise for the fourth month in a row.

As a guide, gas will cost 0.7 percent more for those who only use it for cooking, 1.4 percent who use gas for cooking and hot water, and 2.4 percent in households heated by gas.

 

Petrol and diesel price rises

Bad news for motorists as the price of petrol will rise by 7.6 cents per litre in France and the price of diesel by 3.84 cents. 

Cigarettes

The French government is on track to make cigarettes €10 a packet in three years time, but the price hike will be staggered. In March smokers will have to pay €1.10 extra for a packet of cigarettes. 

Vélib

France’s bike-sharing scheme has moved from JCDecaux to Smovengo, and the change of hands means some changes that will affect its users.

READ MORE: Paris: Here's how the Velib' bike share is set to change

As well as introducing several electric bikes, this also means prices are going up.

Customers will be able to choose between a one- or seven-day pass, for €5 or €15 respectively, or a monthly subscription, with prices starting at €3.10 or €8.30 and additional charges depending on how much you use the service. There’s also a free subscription offer, where users pay a slightly higher rate per minute. Full details of the new fees can be found on the scheme’s website.

You better Velib' it: Cost of renting Paris city bikes could jump in future
Photo: AFP

Parking

2018 brings the end of France’s nationwide €17 fine for those found guilty of parking offences, with the charge being replaced with a ‘post-parking fee’ (SPF), which will be set individually by each municipality.

This fee may not be higher than the rate for the maximum authorized parking period, so it varies considerably across the country, ranging from €10 in Castres to €60 in central Lyon, according to Autoplus.fr.

Drivers in the capital will risk parking fines of €50 in the first 11 arrondissements and €35 in the rest, though there will be a significant reduction — to €35 or €24.50 respectively – for prompt payment.

Banking

On average, bank fees will see a 0.25 percent increase in 2018 compared to last year, with the annual charge an average of € 194.30, according to a study from financial comparison site Panoramabanques. The good news is that this a much more modest increase in fees than in the past two years.

The study from Panorabanques looked at the rates of 158 banks which represent 95 percent of the total market, and found that 99 of them would raise their fees this year — by an average of €4 — while 44 will get cheaper.

Hospital charges

Most standard hospital expenses are covered by France’s social security, except for a flat fee — le forfait hospitalier or hospital copayment — which patients have to pay for each day spent in hospital.

This charge has been fixed at €18 per day since 2010, but goes up to €20 this year. However, the vast majority of the population don’t pay this fee directly, as it is covered by other insurance policies.

And the good news…

Bonus to change old cars

2018 is a good year to get rid of an old vehicle, as France’s ‘scrapping bonus’ paid out to those who get an old car scrapped in order to buy a more environmentally-friendly one, will be extended to many more motorists.

It’s expected to apply to around 100,000 cars each year, a significant increase since only 21,000 vehicles were eligible for the bonus between April 2015 and September 2017. For the first time, non-taxable households will be eligible.

So how does it work? Anyone scrapping a private diesel car or van registered before 2001 (or 2006, for non-taxable households), or a petrol car or van registered before 1997, and replacing it with a less polluting vehicle, will get money towards the purchase.

The bonus is € 2500 for a new electric vehicle, € 1000 for a new rechargeable hybrid vehicle, or €1,000 for a second-hand electric vehicle, which increases to € 2,000 for non-taxable households.

For members

TAXES

Explained: France’s exit tax

Planning on leaving France? You may, depending on your circumstances, be charged the 'exit tax'.

Published: 11 April 2024 11:28 CEST
Explained: France's exit tax

Like some other European countries, France does have an exit tax for those (French or foreign) who are leaving the country. It’s known by the English name l’Exit tax.

However, it won’t affect most people.

Only those who have been tax resident for a minimum six years of the 10 years immediately before they permanently move out of the country are liable to pay an exit tax – if, that is, they own property, titles or rights worth a minimum of €800,000, or that represent 50 percent of a company’s social profits.

If that affects you, the best advice is to seek expert individual financial advice before moving out of France for good. The relevant page on the French government’s impot.gouv.fr website says it is possible to defer payments, and some relief is available.

Because of the relatively high figures involved, this tax is irrelevant for most people. That said, however, you will still have to inform tax authorities that you are moving out of the country because you may still have income, property and capital gains taxes to pay.

Income tax

You must inform the tax office that you are moving and give them your new address so that your tax declarations can be transferred to your new address.

You are liable for tax on everything you earned in France prior to your departure as well as on any French earnings that are taxable in France under international tax treaties that you earned after your departure.

The year of your departure, you declare your previous year’s earnings as normal – declarations in spring 2024 are for earnings in 2023.

A year later, you will have to declare any earnings taxable in France from January 1st up to the date of your departure, and any French-sourced income taxable source until December 31st of the year of your departure.

If you continue to have any French-sourced income – such as from renting out a French property – you will have to declare that income annually, using the non-residents declaration form.

Property taxes

You will have property taxes to pay if you own a French property on January 1st of any given year – whether it is occupied or not. 

Property tax bills come out in the autumn, but they refer to the situation on January 1st of that year, so even if you sell your property you will usually have the pay a final property tax bill the following year.

Moreover, if you receive income from property in France or have rights related to that property (such as shared ownership or stock in property companies), as well as any additional revenue connected to the property, during the year you leave France, you will be required to pay taxes on these earnings.

If any property assets in France exceed €1.3 million on January 1st of a given year, you may also have to pay the wealth tax (IFI).

READ ALSO What is France’s wealth tax and who pays it?

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Capital gains tax 

If you sell your French property or share of a French property, you may be liable for capital gains tax at a rate of 19 percent. It will also be subject to social security contributions at the overall rate of 17.2 percent.

Capital gains tax varies depending on how long you have owned the property and whether it was a second home or your main residence.

READ ALSO How much capital gains tax will I have to pay if I sell my French property?

The good news is, if you move to another EU country, or any country that has a specific tax agreement with France, you may be exempt from capital gains tax for non-resident sellers on the sale of a property that was your principal residence in France.

If you move elsewhere, you may be able to claim exemption on capital gains tax up to €150,000. As always, you should seek expert financial advice.

Tell Social Security

Inform social security that you are leaving France permanently – and return your carte vitale if you have one. If you do not, you may be liable for any benefits you receive to which you are no longer entitled.

More mundane tasks involve informing utility and water companies, your internet provider, if you have one, the phone company, your insurance companies, banks – and La Poste, who will be able to forward your mail for up to 12 months, for a fee…

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