Acquiring a vineyard, a real estate investment shared by many French investors

What kind of person gets involved in projects like acquiring a vineyard? First of all, it's important to point out that 60% of all the transactions carried out on French territory, are carried out by French nationals. This proves that wine remains one of the nation’s many passions, firmly rooted in French tradition. Nevertheless, the buyer profiles of such properties can vary considerably depending on the type of project and the region of choice.

Generally speaking, most real estate buyers who are passionate about wine are men, not too far from retirement, and are in search of a new activity that they consider to be a passion. Winemaking is of course a fantasy that captures the collective French imagination, with a certain prestige. The magnificent landscape and setting offered by vineyards can be a motivating factor for some, especially to escape the city and its urban environment. Others may also look at it as a tax-efficient investment, as wine-growing estates may be partially exempt from Wealth Tax under certain conditions and is also subject to lower inheritance taxes.

Of course, not just anyone can acquire a vineyard. Between the cost of buildings, vineyards, property and land, wine cellar, equipment, and stocks, the entry ticket is estimated at between 2 and 4 million euros according to industry specialists. However, the prices of each asset vary according to the region in which the vineyard is located. For example, in the Var or Provence, buildings alone can be worth up to 80% of the property price, whereas in Bordeaux, it’s the land that is more valuable. 

There are however properties that sell for less than that. Starting at 800,000 euros, it is possible to acquire a small vineyard covering over 12 acres. In this context, it is no longer possible to talk about starting a wine-growing business, but rather a passion-driven purchase that will not necessarily be oriented towards profitability. It is good to keep in mind that a vineyard is essentially a company and a real estate investment, which in turn, involves a certain amount of administrative and managerial activities that should be taken into account.

In general, the process of acquiring a vineyard is only the first step in a long chain of decisions to keep the estate running. It is also a question of running a real business, which requires the owner to be constantly on the premises.

Beyond the financial investment, a human investment is also required for operations to run smoothly. Renovation costs for buildings should also be expected, depending on the property. Nevertheless, some buyers first and foremost appreciate the beauty and charm of their property, making the property's profitability a secondary concern, and more a source of entertainment.

When it comes down to it all, it’s clear that the act of buying a vineyard cannot be achieved without a having the necessary passion for wine. The personal and financial investment to be made is substantial, and results could take more than a decade to appear. This is why acquiring a vineyard is an initiative that must be carefully thought out and studied beforehand, in order to leave nothing to chance when it comes to taking the plunge. Good advice is essential when making such an acquisition. Our Engel & Völkers expert in wine estates accompanies our clients in their search for the right property and make sure their projects are successfully in place.