French parliamentarians push ahead with measures to tax cryptocurrencies as ‘unproductive wealth’

French lawmakers have voted to move forward with reforms to the country’s tax law that would tax “unproductive wealth” including certain types of real estate and holdings of cryptocurrencies.

Centrist MP Jean-Paul Mattei introduced the amendment on October 22nd, and late Friday, with support from socialists and far-right MPs, MPs in the National Assembly (lower house) passed it by a vote of 163 to 150.

The bill must survive the rest of the legislative process as lawmakers aim to pass the 2026 budget, and the bill must pass the Senate to become law.

A summary of Matei’s amendments said the current real estate wealth tax law is “economically inconsistent” because it “excludes non-productive goods from its plate” such as “gold, coins, classic cars, yachts and works of art.”

He argued that the new tax would “promote productive investment” as the current system does not take into account assets that can “contribute to the dynamism of the French economy”.

Cryptocurrency wrapped in “unproductive” assets

The brief notes that “non-productive goods” are no longer exempt under the law, and taxable assets have been expanded to include “non-productive” real estate, assets such as “valuables” and airplanes, and even “digital assets.”

The tax would only be imposed on people with “unproductive wealth” of more than 2 million euros ($2.3 million), up from the 1.3 million euro ($1.5 million) threshold under current law.

Tax rates will also change, with a flat rate of 1% levied on taxable assets above the €2 million threshold.

The current real estate wealth tax is progressive, starting with no tax for assets under 800,000 euros ($922,660) and jumping to 1.5% for assets over 10 million euros ($11.5 million).

The proposed amendment to include digital assets appears to have disappointed local cryptocurrency enthusiasts.

Related: EU considers SEC-like oversight of stock and crypto exchanges to strengthen startup environment

Eric Larschvek, co-founder of cryptocurrency wallet maker Ledger, said on Saturday that the proposed amendments “punish all savers who want to rely economically on gold or Bitcoin to protect their future.”

sauce: Eric Larsvek

He added: “The political message is clear: Cryptocurrencies are equated with unproductive reserves and are of no use to the real economy.” “This is a serious ideological error, but it also reveals a fiscal shift towards penalizing the holding of value outside of the fiat monetary system.”

Larsbeck said French crypto holders could be forced to sell their assets to pay the tax if they have no other liquid assets, and expressed concern that the 2 million euro threshold could be lowered subsequently.

“There’s certainly still some legislative work to do to get this into the 2026 PLF (budget), but it’s still likely to come into effect on January 1st,” he said.

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