The 2026 Finance Act introduces several important changes in local taxation for businesses: revision of rental values for business premises, changes to the CFE, new rules for updating industrial rental values and adjustments to exemption schemes. These measures will have a direct impact on property tax and business property tax bases from 2027.
Revision of rental values for business premises
Integration of first six-yearly update postponed to 2027
The first six-yearly update of the valuation parameters (sectors, rates, location coefficients), carried out in 2022 on the basis of «Decloyer» data, was to apply to the 2026 tax assessments.
Its integration is deferred to the 2027 tax bases.
Consequences:
- No annual rate updates in 2027; ;
- The second «reinforced» six-yearly update will take place after the 2032 municipal elections.
2026, the last year of the corrective mechanisms resulting from the 2017 reform
Article 106 adapts the three historical corrective measures in different ways:
- Planchonnement: extended to 2026 to avoid sudden variations; ;
- Neutralization coefficient (2017 version): maintained in 2026 ;
- Smoothing by tenths (2017-2025): abolished from 2026.
Thus, 2026 will be a pivotal year: structural corrective measures will be maintained, and historical smoothing will be phased out.
From 2027: new neutralization coefficient and smoothing over six years
As simulations have revealed significant differences in rental values, two shock absorbers have been introduced:
- Neutralization coefficient recalculated on January 1, 2027, by tax and by local authority, based on updated values; ;
- New smoothing by sixths (2027-2032) of changes in rental values.
Smoothing ceases in the event of :
- Change in consistency, use or valuation method ;
- Change of operator (CFE) or occupant.
Any real estate restructuring may result in the loss of the smoothing benefit.
Revision of residential rental values: three-year delay
The timetable for the revision of residential premises has been postponed:
- Rent collection: 2028 ;
- Integration of new bases: 2031 ;
- Annual obligation to declare rental income: from 2029.
The neutralization coefficient will be recalculated in 2031 when the new bases are integrated.
Neutralization effect extended to 2031. Adjustment peak deferred.
Industrial rental values: new annual updating method
Until now, industrial buildings valued using the accounting method (CGI, art. 1499) were revalued annually on the basis of the HICP (inflation).
As of 2027 taxes:
- Indexation will be based on the national average of professional rent evolution coefficients; ;
- The aim is to bring the system for industrial establishments into line with that for business premises, and to limit automatic increases linked to inflation.
Less inflationary volatility, but greater dependence on the rental market.
ICPE: reinstatement of the pro rata temporis CFE rebate
The French Finance Act for 2025 had excluded from the pro rata temporis rebate the cessation of activities at ICPEs requiring depollution.
Article 44 re-establishes the common law system:
- In the event of total cessation of activity, the CFE is not due for the remaining months; ;
- Applicable to terminations on or after January 1, 2026.
The exclusion voted for in 2025 will therefore never have any effect.
Cash flow relief for closed sites undergoing decontamination.
CFE extended to unincorporated entities
Article 1447 CGI has been amended to refer not only to unincorporated «companies», but to all unincorporated «entities».
These include
- Régies ;
- Joint ownership ;
- Fund without legal personality.
The measure is expressly qualified as interpretative: it is therefore retroactive.
Recommended audit of atypical structures. Secure recall risk.
Extension of local exemptions for start-ups
CFE and/or property tax exemptions for young innovative companies have been extended for companies created up to December 31, 2028.
Features :
- 7-year exemption ;
- Subject to local deliberation ;
- Applicable to companies created on or after January 1, 2026.
This is the fifth three-year renewal of the scheme.
Extended territorial optimization window for innovative projects.
Quays and port medians
The reference date for the flat-rate valuation of harbor quays and platforms (excluding pleasure craft) has been standardized to January 1, 2021.
The measure applies to taxes levied from 2027 onwards.
Objective: harmonization with other scale-based flat-rate methods.
Secure port bases, less variability linked to creation date.
Horticultural buildings: optional TFPB exemption
Creation of a specific property tax exemption for buildings used exclusively and concurrently for growing and selling horticultural products:
- Permanent exemption ;
- Optional, by local decision ;
- Possible from 2026.
Targeted opportunity for horticultural groups depending on local tax policy.
Reclassification of some very large agricultural stores
Very large supermarkets whose uncovered outdoor area is mainly devoted to the sale of agricultural products change category:
- Change from «stores and sales outlets» (MAG) to «land for commercial or industrial use» (DEP) ;
- Applicable from 2026 for property tax and CFE.
Potential favorable adjustment of categorical tariff for outdoor surfaces.
Things to remember
The 2026 Finance Act is part of an ambitious transition phase for local business taxation, This is particularly true of rental values for business premises.
- 2026 is a relatively stable year The main corrective mechanisms resulting from the 2017 reform have been maintained. The integration of the first six-yearly update of rental values has finally been postponed.
- 2027 will mark an important turning point Rental values for business premises will be updated, with a new neutralization coefficient and a smoothing mechanism over six years.
- Real estate and organizational decisions can have a tax impact Certain operations (property restructuring, change of operator, change of use) may result in the loss of the smoothing mechanism.
In this context, an anticipated analysis of local tax bases can help identify potential impacts and anticipate future changes.
Our teams can help you analyze your local tax bases and identify the impact of these changes.
FAQ - Finance Act 2026 and local taxation
What does the Finance Act 2026 change for local business taxation?
The 2026 Finance Act introduces a number of changes to local business taxation, notably concerning rental values for business premises, the procedures for updating industrial rental values, and certain rules applicable to CFE and property tax.
The integration of the first six-yearly update of rental values for business premises has been postponed until 2027. The year 2026 thus represents a transitional phase before more significant changes in tax bases.
Why is 2026 a pivotal year for rental values?
The year 2026 corresponds to the last year of application of certain corrective mechanisms resulting from the 2017 reform.
The "planchonnement" and neutralization coefficients remain applicable, but the historical smoothing mechanism applied between 2017 and 2025 disappears. This change gradually alters the way local tax assessments are interpreted.
When will the revised rental values for business premises apply?
The first six-yearly update of the valuation parameters was initially scheduled to apply to 2026 taxation.
The 2026 Finance Act finally postpones its integration to 2027 tax bases, which concentrates the potential impact of the reform from that date onwards.
What mechanisms will limit changes in rental values from 2027?
To cushion the impact of changes in rental values, two mechanisms have been introduced:
- A new neutralization coefficient, recalculated to January 1, 2027 ;
- A smoothing mechanism over six years (2027-2032) changes in rental values.
However, this smoothing may cease in the event of a major change to the building or operation.
What are the points of attention for finance departments?
Three points in particular are worth noting:
- 2026 is a relatively stable year before the changes in 2027 ;
- Updating rental values could redistribute tax bases between taxpayers ;
- Some real estate transactions or changes of operator can call smoothing mechanisms into question.
An early analysis of local tax bases can help identify potential impacts and anticipate future changes.
Written by
Clément CARRAY - Local tax expert
A senior local tax consultant since 2009, Clément draws on his solid expertise to handle more than 100 assignments per year. He advises his clients on tax optimization and helps them implement appropriate measures.
