France’s Controversial 1% Wealth Tax on Crypto: What You Need to Know in 2025
- Why Is France Taxing "Unproductive" Crypto Wealth?
- How Does the New Crypto Tax Work?
- Political Backlash and Investor Exodus Risks
- Historical Context: From Real Estate to Crypto
- Global Implications: Will Europe Follow?
- FAQ: Your Top Questions Answered
France is shaking up the crypto world with its new "unproductive wealth tax," targeting assets like Bitcoin, gold, and luxury goods. Starting in 2026 (pending Senate approval), holdings over €2M will face a 1% annual levy—even on unrealized gains. Critics warn of forced sell-offs and capital flight, while supporters argue it curbs speculation. With 5.5M French crypto investors, this could set a precedent for Europe.
Why Is France Taxing "Unproductive" Crypto Wealth?
France’s National Assembly just greenlit a bold move: a 1% annual tax on crypto, gold, yachts, and other assets deemed "unproductive." Dubbed "IFI 2.0," this law expands the existing real estate wealth tax to include speculative holdings. The logic? These assets "create no jobs or growth," says the government. But here’s the kicker—it applies to, meaning you’ll pay even if you don’t sell. Imagine holding €3M in Bitcoin; you’d owe €10K yearly just for HODLing. Ouch.
How Does the New Crypto Tax Work?
Threshold: €2M net worth (excluding primary homes). Above that? 1% on the excess. You’ll need to declareholdings annually—even offshore wallets. Miss a filing? Penalties rocket to 80%. Compare this to Germany’s capital gains tax (only on sales), and it’s clear France is playing hardball. "This punishes savers using bitcoin as inflation hedge," argues Éric Larchevêque, Ledger co-founder. Volatile markets could force fire sales to cover taxes—a risky game.
Political Backlash and Investor Exodus Risks
Passed by a razor-thin majority, the tax faces fierce criticism. France already has Europe’s highest top tax rates (up to 45% income tax + 17.2% social charges). Add this, and wealthy folks might bolt. "Next, they’ll tax small holders," warns Larchevêque. Ironically, France pushed MiCA regulations to attract crypto firms—now it’s scaring them. Case in point: Crypto.com delayed its Paris HQ plans last month, per.
Historical Context: From Real Estate to Crypto
IFI 1.0 (2018) taxed real estate over €1.3M. IFI 2.0 casts a wider net:
- Crypto (all coins, staked assets)
- Luxury items (art, yachts, jewelry)
- Gold bars/reserves
- Vacant properties
Global Implications: Will Europe Follow?
Spain and Portugal already tax crypto gains, but France’s unrealized-gains approach is radical. If successful, Brussels might copy it post-MiCA. "This isn’t just about France—it’s a test for EU crypto policy," a BTCC analyst notes. Meanwhile, Swiss and UAE crypto hubs are luring French whales with tax-free regimes. Talk about timing.
FAQ: Your Top Questions Answered
When does the tax start?
2026, if the Senate approves (vote expected Q1 2026).
Does it apply to NFTs?
Yes, if part of a €2M+ portfolio. Even Beeple’s $69M art WOULD qualify.
Can I avoid it legally?
Options are slim. Trusts might help, but France taxes residents globally. Non-residents? Only French-sited assets.
