Buying or selling a forest: how to do it?
Buying a forest is not a harmless act. Ecological, environmental, civic, economic, heritage ... whatever its motivation, the purchase of a forest must be carefully considered.
What is the difference between a wood and a forest?
Wood and forest mean a certain area of land planted with trees. However, the name of forest only applies to a wood whose area exceeds 5000 hectares.
How to buy a forest?
Before buying a forest, it is important to first define your budget.
Then, we must think not only about the geographical area in which the purchase will be made, but also the type of stand that we want: coppice, high forest, softwood, young plantation, ... We must not neglect the costs of maintenance to be envisaged after the purchase: clearing, depressing, clearing, removal of dangerous trees, ....
It will also be important to check whether the forest you intend to acquire has been the subject of specific commitments as part of its management or environmental or urban planning constraints: simple management plan, classified wooded area, Natura 2000, sensitive natural area, natural park, ....
How to sell a forest?
When you want to sale of a wooded parcel, specific legislation applies: preferential right in favor of the neighbors and the municipality if the property sold has a total area of less than 4 hectares, preemption right of the municipality and in some cases.
If the sale generates a capital gain, a specific regime for calculating the deductions for holding period is applicable.
Investing in the forest: what tax benefit?
Taxation of the forest is also a criterion to be taken into account in his project: besides the tax on the property tax that can possibly generate the holding of a forest, its exploitation (mainly cutting and selling wood) will lead to specific taxation on income tax. This regime applies regardless of the size of the properties used, whether the taxpayer has another activity or not. The holder of a forest will be subject to the forest lump sum regime: he must declare a lump sum amount which corresponds to the income on which the property tax on these properties was based for the taxation year. The acquisition of a forest, in certain cases provided for by Article 199i of the French General Tax Code, may allow the owner to benefit from a reduction of income tax.
In addition, the value of the forest held by the taxpayer is included in the calculation base of the real estate tax (IFI). However, subject to compliance with a number of conditions, Article 976 of the French General Tax Code stipulates that "properties in kind of timber and forests are exempt up to three quarters of their assessed value".
In addition, transfers of timber and forests in the event of death or gift, under certain conditions, benefit from a derogatory tax regime and benefit from an exemption up to three quarters of their assessed value for the calculation of inheritance tax.