Increase in taxation approaching for your investments. Thursday, November 6, as part of the review of the Social Security budget, the National Assembly adopted an increase in the generalized social contribution (CSG) on capital income, which goes from 9.2% to 10.6%. Taken individually, this tax may not mean anything to you. However, it is part of the single flat-rate levy (PFU), the famous “flat tax”, currently composed of 12.8% income tax and 17.2% social security contributions.
However, the latter are themselves made up of the generalized social contribution (CSG) of 9.2%, the contribution to the repayment of the social debt (CRDS) of 0.5% and the solidarity levy of 7.5%. With the increase in the CSG from 9.2% to 10.6%, the flat tax as a whole will therefore be increased from 30% to 31.4%. But will this increase have a significant impact on the return on your savings? To see this, let’s take an overview of the investments concerned.
Returns at half mast for banking products: savings accounts, term accounts, PEL, etc.
First of all, we think of bank savings products, which, apart from the Livret A, the Livret d’épargne populaire (LEP) and the Livret de développement durable et solidaire (LDDS), are subject to flat tax. This is, for example, the case for housing savings plans (PEL) since 2018. Thus, for PELs which will be opened by December 31, the already low rate of 1.75% will become even less attractive. Net of flat tax, its yield plummets to 1.225%, and to 1.2005 with a rise in flat tax to 31.4%.
Other investments distributed by banks and which can be useful for short and medium term savings: traditional bank accounts and term accounts. At present, the best super booklet on the market (Livret + Fortunéo) displays an annualized remuneration of 2.45% gross, which would fall to 1.6807% with the new CSG, compared to 1.715% with the current flat tax. Same for the best futures account (Monabanq), which can offer up to 3.4% gross over a locking period of five, and which would only yield 2.3667% with the increase in the CSG, compared to 2.415% currently.
However, it must be noted that, compared to the interests actually received, the difference can be slight. An investment displayed at 3% gross on which 100,000 euros is paid – i.e. the maximum amount covered on these products by the Deposit Guarantee and Resolution Fund (FGDR) – earns 2,100 euros in interest with the current flat tax (30%), compared to 2,058 euros with the increase in the CSG included, i.e. 42 euros difference with this example.
Life insurance and PEA: total social security contributions increase from 17.2% to 18.6%
Taxation can also be reduced with savings products such as life insurance or the stock savings plan (PEA). In life insurance, social security contributions are withheld each year from the interest on the Euro fund. Also, the average expected rate on the market in 2025 would increase from 2.65% gross to 2.1571% net of 18.6% social security contributions (compared to 2.1942% to 17.2%). But in the event of redemption (withdrawal) after 8 years, you benefit from an annual reduction of 4,600 euros (for a single person) or 9,200 euros (for a married couple) on the earnings generated by the contract.
Beyond this reduction, remember that the flat-rate deduction is not 30% but 24.7% (for payments made after 2017) or 7.5% income tax and 17.2% social security contributions. With the increase in the CSG, this taxation would be increased from 24.7% to 26.1%. Finally, on a PEA, the difference should also be slight. Since, provided you do not make any withdrawals during the first five years, you are not taxed. After this period, only social security contributions remain due if you wish to recover part or all of your earnings, at a rate which would therefore increase, here too, from 17.2% to 18.6%.
In real estate, taxation which approaches 50% for taxpayers whose TMI is at 30%
Finally, the increase in the CSG will also have an impact on the taxation of property income, whether it concerns rents received via a rental investment, or dividends received via a real estate investment company (SCPI) invested in France. Property income is in fact subject to the progressive scale of income tax, as well as social security contributions.
And these two levies are combined: an investor with a marginal tax bracket (TMI) of 30% must therefore pay a total tax of 47.2%, which would be increased to 48.6% with the increase in the CSG. With a TMI of 41%, the tax bill rises to 59.6%, and to 63.6% with the highest TMI, at 45%.
Note that for SCPIs, betting on vehicles that invest in Europe (and in countries that have signed a tax treaty with France) can make it possible to avoid social security contributions, and therefore to reduce taxation at 18.6%.
