The loi de finances for 2011, has brought about the following modifications:

Top marginal tax rate increased by 1%

-The top marginal tax rate was increased from 40% to 41%. This rate applies to net taxable revenues in excess of 70.830 euros.

Increase in social tax rate

-The social contribution taxes (CSG & CRDS, & prelevement sociale) were increased by .2% from 12.1.% to 12.3%. This tax applies to all non-salaried income (ie dividends, capital gains, etc).

Capital gains threshold abolished

-All sales of stocks and securities that result in gains are subject to the capital gains tax. The threshold (which was 25 830 euros in 2010) has been abolished. Therefore, the entire gain is taxed and not just the amount that exceeds a thresshold. Furthermore, the capital gains tax rate has increased from 18% to 19%, in addition to the social taxes of 12.3%.

Tax increase on real estate gains 

-The tax rate on gains from the sale of real property has increased from 16% to 19%, in addition to the social taxes of 12.3%. Please note that if you own the property beyond 15 years, upon sale you will only be liable for the 12.3% social tax on any potential gain.

Dividend tax credit abolished

-The 50% tax credit on dividends, which in 2010 was limited to 115 euros for single and 230 euros for joint filers has been abolished. 

Mortgage interest tax credit abolished

-The tax credit on mortgage interest applicable to the purchase of a principal residence has been abolished.

Reduction in benefit on tax incentive schemes

-There is a 10% reduction on a number of tax incentive schemes such as loi Malraux investments, investments in the DOM-TOM, certain energy saving investments,etc.

Multi-based life policies less attractive

-As of July 2011 multi-based life insurance policies will be subject to social taxes at 12.3% annually and not only upon withdrawal of funds. 

ISF threshold increase

-The threshold for the French wealth tax has increased to 800.000 euros.