Buy or sell a forest: how to go about it ?
Purchasing a forest isn’t an insignificant act, which is bought on an impulse. It is an ecological, environmental, civic, economic, heritage-like approach... regardless of the motivation, purchasing a forest needs to be mulled over, carefully
What is the difference between woods and a forest?
A wood and forest means a certain area of land planted with trees. However, the name of the forest only applies to woods, whose area exceeds 5000 hectares.
How to buy a forest?
Before buying a forest, firstly is required to define your budget.
Then, it is necessary to think not only about the geographical zone in which the purchase shall be carried out, but also on the settlement type that one desires: brushwood, timber, coniferous, young plantation… One should not neglect maintenance costs, which need to be planned after the purchase: trimming, depressing, thinning, removal of dangerous trees, …
It shall also be necessary to make sure whether the forest that you plan on acquiring, has gone through specific commitments within the framework of its management or peculiar environmental or urban planning constraints: simple management plan, protected woods, Natura 2000, sensitive natural area, natural park, ….
How to sell a forest?
In the event of a sale of a wooded plot, specific legislation applies; preferential rights in favor of neighbors and the municipality if the sold property has a total area of less than 4 hectares, the municipality's right of pre-emption and State, in some cases.
If the sale generates a surplus value, a specific scheme for calculating the deductions for a holding period, applies..
Invest in a forest: what are the tax concessions?
Taxation of the forest is also a criterion, which needs to be taken into account, in one’s project: in addition to the taxation under the property tax , which can possibly trigger possessing the forest, its exploitation (cutting and sale of wood mainly) will lead to a specific taxation under income tax. This regime applies regardless of the size of the properties which are exploited, whether the taxpayer has another activity or not. The holder of a forest shall be subject to the forest lump sum regime: he will have to declare a lump sum amount which has been set, that corresponds to the income having served as the basis for the property tax on these properties for the tax year. The acquisition of a forest, in certain cases provided in article 199 decies H of the General Tax Code, may allow its owner to benefit from an income tax reduction.
Moreover, the value of the forest held by the taxpayer, is included in the basis for calculating the property wealth tax (IFI). However, subject to the compliance with a number of conditions, article 976 of the General Tax Code, specifies that "properties in-kind of wood and forests are exempt up to three quarters of their assessed value”.
In addition, transfers of wood and forests in the event of death or in the event of donations may under certain conditions, benefit from a special tax regime and benefit from a waiver, which goes up to three quarters of their taxable value for the inheritance tax calculation. Given all the peculiarities of the forest, the prior advice of a notary, a heritage and tax professional, shall ensure the legal and fiscal security of your project.