The advantages of investing in a vineyard

“Wine and wine-growing regions are part of the cultural, gastronomic and landscape heritage of France”, affirmed the Senate in a report in 2014. In France alone, the vine covers 750,000 hectares spread over 66 departments. Nicknamed “red gold”, the wine makes investors salivate: in 10 years, the value of hectares of Cognac has jumped, for example, by 167% while the lands of Pessac Léognan have soared by 235%.

Please note: buying a farm alone is not easy. The average price of a hectare of vines is around € 147,300 in France. You must then submit an application for an operating permit to the Prefect of the chosen department. The use of land requires a lot of expertise, a wine-growing, wine-making and commercial know-how that is not very accessible to the general public.

Buy pieces of vineyard

In this case, if you wish to invest in wine, another solution is available to you: you can fall back on the acquisition of a Groupement Foncier Viticole (GFV). Tickets vary between € 1,200 and € 200,000 (depending on the regions and appellations). These GFVs allow you to own a more or less important part of a vineyard. These civil companies (like real estate investment REITs) bring together a small number of partners. They provide funds to allow a winegrower to settle and let him manage their estate from A to Z under a long-term lease of 18 to 25 years. The operator then transfers the profits generated by the sales of bottles to investors each year according to the number of shares they hold. Profitability can reach 4% per year for certain plots and the shares can be resold at a high price.

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Mutualised but very real risks

Mistrust, many hazards shake the profitability of the vines. Climate change damages plans (spring frost, storms, hail, drought…) and can completely wipe out a year’s crops. Diseases, like downy mildew or powdery mildew, cause great losses. The value of GFV’s shares changes from year to year depending on the profits of the vineyard. Rest assured, the value of wine is increasing and the lands are following this trend.

Tax deductions

The shares of a vineyard remain taxable in the same way as the land. By choosing to invest in this area, you benefit from attractive tax advantages: in the event of a credit acquisition, the interest is deductible from other property income. If you pay the Tax on Real Estate Fortune (IFI), owning vines grants you an exemption of up to 75% up to 101,897 euros and then 50% beyond. In the event of death, your successors will benefit from a partial exemption from inheritance tax up to a limit of 300,000 euros.

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