Tax reform 2026: what will really change for you

A clear overview of the main measures

In the night of 11–12 December 2025, a major federal tax reform was adopted.

It will have a direct impact on private individuals, self-employed persons and company directors.

Most measures apply to income earned in 2026, to be declared in 2027.

The legislator’s objectives are:

• to simplify taxation,
• to encourage more sustainable behaviour,
• and to restore public finances.

In practice, many existing tax benefits disappear, while a few targeted incentives are strengthened.

Housing: the end of many federal tax benefits

This is one of the most significant changes.

From 2026 onwards, most federal tax benefits related to real estate disappear, especially when the property is not the main residence.

This concerns in particular:

• former federal housing bonuses,
• interest deductions on certain loans,
• tax reductions for energy-saving renovations,
• benefits for low-energy, passive or zero-energy homes,
• former “green” loan schemes.

Result:

Real estate investments (second homes, rental property, renovations) will no longer benefit from specific federal tax relief.

Any remaining support will mainly come from regional authorities.

Company cars: more detailed and stricter rules

The reform continues the shift towards greener mobility, with more detailed and stricter rules, especially for the self-employed.

From 2026, deductibility of car expenses will depend more strongly on:

• the type of vehicle (combustion, plug-in hybrid or electric),
• its CO₂ emissions,
• the type of cost (electricity or fuel),
• and the date of purchase or leasing.

Plug-in hybrid vehicles

A specific regime applies to plug-in hybrids.

Electric charging costs remain deductible under the rules applicable to electric vehicles.

Other costs (leasing, maintenance, insurance, tyres) are subject to a deduction formula based on CO₂ emissions, with caps depending on the year of acquisition.

From 2026, fuel costs are no longer deductible, even for recent plug-in hybrids.

Combustion vehicles

For fully combustion-powered vehicles, deductibility decreases progressively over time.

Older vehicles still benefit temporarily from a minimum deduction, but this minimum is gradually reduced.

Keeping a combustion vehicle for a long time will therefore lead to a growing tax burden, even if the car is fully paid off.

Electric vehicles

Electric vehicles remain the most favourably treated from a tax perspective.

Their costs continue to benefit from the highest deduction rates, making them the most attractive option in the long term.

Key takeaway:

Choosing a company car must now be based on the total after-tax cost, not only on purchase price or comfort.

Children as dependants: significant easing

Good news for families: the income threshold allowing a child to remain a dependant is substantially increased.

• Previous threshold: around 1,800 euros
• New threshold: 5,285 euros

Children with their own income (for example from student jobs) can therefore more easily remain dependants, preserving the tax benefit for parents.

Maintenance payments: reduced deductibility

The deductibility of maintenance payments is reduced gradually:

• 2025: 70 %
• 2026: 60 %
• From 2027: 50 %

At the same time, the taxable portion for the recipient is also reduced.

The net effect is an increased after-tax cost for the payer, especially at higher income levels.

Flexi-jobs: higher exempt ceiling

The flexi-job system remains in place and is strengthened for non-retired workers.

The fixed ceiling of 12,000 euros is replaced by an automatically indexed base amount, resulting in an effective ceiling above 15,000 euros from income year 2025.

Self-employed persons: stronger incentive to build capital

The tax credit for self-employed persons who retain funds in their activity is significantly reinforced:

• rate increased to 20 %,
• annual ceiling raised to 7,500 euros,
• refund possible if the credit exceeds the tax due.

Tax return: simpler, but less generous

To simplify the tax return, many small tax reductions are abolished, including those for:

• electric cars for private individuals,
• charging stations,
• legal protection insurance,
• adoption costs,
• domestic staff.

Tax audits and financial transparency

Two important developments:

• clearer rules on audit periods, depending on the situation,
• extension of the central reporting system to securities accounts and crypto accounts, including balance reporting.

Transparency becomes the standard.