Why investing in a Bordeaux vineyard in 2024 ?

Why invest in a Bordeaux vineyard in 2024 ?

Bordeaux, the emblematic city of the south-west, is world-renowned for its exceptional wines and unique territory. The growing appeal of the Pearl of Aquitaine is undergoing a spectacular renaissance thanks to major development in recent years.

Investing in a Bordeaux vineyard is much more than just buying property. It's about immersing yourself in a world where a passion for vines and wine blends with tradition and history. For many, investing in a wine estate is an affair of the heart, a way of preserving and contributing to France's wine heritage.

The quality of the Bordeaux Terroir

A Terroir is defined as a set of natural factors and human resources that combine to give a wine its uniqueness and identity.

Bordeaux has a unique ecosystem that is favourable to farming and is the result of a combination of soil and climate.

The soils are characterised by gravel, clay, and limestone. Particularly well-drained, they provide an ideal environment for the vines to thrive. Bordeaux's oceanic climate, with its hot summers and mild winters, creates favourable conditions for regular ripening of the grapes (essential for high-quality wines).

The Bordeaux region selects the grape varieties best suited to each plot: Merlot, Cabernet Sauvignon, Cabernet Franc, and Malbec are planted according to the characteristics of the soil and climate. This allows us to maximise the potential of each grape variety by growing them in an ideal environment.

The quality of the Bordeaux terroir is also reflected in the commitment of the region's winegrowers to an environmental approach.

It's no coincidence that over 60% of Bordeaux vineyards have been awarded labels or certifications. Among the most widely recognised labels is the AOC (Appellation d'Origine Contrôlée), which guarantees the origin and quality of the wine. Many estates also have obtained the Organic Agriculture Ecocert or Qualisud label or even the Biodynamic Agriculture label such as De Demeter and Biodyvin.

Thanks to various initiatives, since 2020 Bordeaux has had 75% of its vineyards certified by labels. These quality labels reflect the excellence of the Bordeaux terroir and the ancestral know-how of the region's winegrowers. They are proof that the Bordeaux terroir is not only ideal for growing vines.

Tax Advantages

Investing in a Bordeaux vineyard is a good way to diversify your assets away from traditional property and financial investments and offers considerable tax advantages.

Investors with no prior knowledge of the wine industry can become co-owners of a vineyard. The principle is to acquire shares in agricultural land via a Groupement Fonciers Viticoles. This enables several investors to join to buy and collectively own one or more vineyards.

Buying shares in a Groupement Foncier Viticole (GFV) is a long-term investment offering an average return of 1.15% to 3.3% a year, with low liquidity.

Buying shares in a GFV means that investors do not have to deal directly with vineyard management, which is usually entrusted to a professional winegrower under a long-term lease.

If you are subject to “Impôt sur la Fortune Immobilière” (property wealth tax), under certain conditions you can claim an allowance of up to 75% of the value of your shares purchased in a GFV. This tax advantage is particularly attractive for those seeking to optimise their tax position while diversifying their assets.

The French tax system favours the transfer of vineyards by gift or inheritance. As a result, if the land is farmed under a long-term rural lease, partial exemptions may be applied at the time of transfer, subject to certain conditions.

In the same case, the sale of agricultural shares or businesses can also benefit from partial or total exemption on the capital gains realised.

It is also important to point out that an investment in a vineyard can be remunerated with an endowment in kind in the form of bottles of wine.

A long-term Investment

Over the last 30 years, property has remained one of the best financial investments.

The aim of investing in a Bordeaux vineyard is to increase its value over the medium to long term, so that you can count on a strong increase in the value of the land when you resell it.

Producing quality wines is a delicate, lengthy process that requires patience, expertise, passion, and capital. Wines can take several years to reach their full potential, and the continuous improvement of viticultural methods can also take time.

For many, investing in a vineyard is a lifelong commitment, a way of leaving a legacy and helping to preserve an age-old French tradition.

Investing in a Bordeaux vineyard is a unique opportunity that combines a passion for wine with financial benefits. Whether you're a wine lover or a shrewd investor, Bordeaux vineyards offer inestimable added value.

The Bordeaux Sotheby's International Realty team is here to guide you on this wine adventure, offering expertise and in-depth knowledge of the Bordeaux Wine Market.