The price of rented land in France

Updated on 26 August 2024

In addition to our article on the sale price of land in France in 2023, this article looks at changes in the sale price of leased land since 2012.

A slight increase in the price of rented land in France in 2022

On average, a hectare of rented land will have a market value in 2023 of €5,120, compared with €6,200 for land available for rent, a discount of 17%.

This price is 1.4% higher than in 2022.

The difference in value between leased and unleased land is narrowing year on year (it was 26% in 2015 and 25% in 2012), a sign of the current attractiveness of farmland.

In contrast to unleased land, rising prices have enabled the value of land holdings to be kept in line with inflation since 2012 (21.5%), although there are differences between regions: 

• Growth ahead of inflation in : Brittany (+27%), Hauts-deFrance (+41%), 
• Valuation close to inflation in : Centre-Val de Loire (+24%), Ile-de-France (+23%), Normandie (+38%), Nouvelle-Aquitaine (+23%), Pays de la Loire (+21%), Grand-Est (+19%)
• Loss of value in : Auvergne-Rhône-Alpes (+17%), Bourgogne-Franche-Comté (+13%), 

Why is there a discount on the price of rented land compared to free land?

The price of leased land is usually lower than the price of free land. This is due to the particularities of the rural lease system.

When agricultural land is rented under a rural lease, the farmer is in place for a minimum of 9 years and also benefits from a right to renewal at the end of the lease. Apart from cases where the farmer retires, the lessor takes over the farm (under certain conditions), or where there is a fault in the execution of the lease, the lease is intended to continue. The desire to sell the land is not, for the landowner, a valid reason for not renewing the lease.

Therefore, where the land is leased, the lessor who wishes to sell may do so:

• to its farmer
• to an investor who will receive a rent
• to a farmer who will wait for the end of the lease to exploit the land (note that the conditions for the lessor to take over the land are very strict and require several years' advance notice).

And the farmer will always have a preferential right to buy the land and can also appeal to the Tribunal Paritaire des Baux Ruraux if the proposed transfer price seems excessive.

In practice, this complex legal situation results in a discount of up to 30% compared to the price of free land in some regions.

Is investing in agricultural land a good investment?

Buying farmland for an investor is an investment that has advantages but also constraints.

• The profitability is currently quite good with average returns of between 1% and 5% depending on the amount of rent (note that rents for agricultural land are regulated).
• The profitability of this investment depends on both its rental yield and the evolution of its value over time. Over the last 30 years.
• When the land is rented under a long-term rural lease, the investor can benefit from significant reductions in inheritance tax, gift tax and property wealth tax.
• The value of land is uncorrelated with the financial markets, which makes it a safe investment in the event of a financial crisis.
• Historically, the high inflation of the 1970s and 1980s had a very unfavourable effect on the value of property, which rose less quickly than inflation.
• It is an investment for the very long term: it is a very illiquid investment. That is to say that the resale of the property can take a very long time due to the constraints of rural leases.

In summary, investment in agricultural land can be of interest to the estate. The characteristics of this type of asset must be taken into account, as well as the asset situation and objectives of each individual.

Source : SAFER 2023 - Barème indicatif de la valeur vénale des terres du Ministère de l'agriculture.