A safe investment in forestry

Over the years there have been many so called “safe investments”, however forestry seems to have been overlooked by many as a safe investment until now. Forestry is an important asset to our country, for both financial and climatic reasons, and the Government has recognised this.

Forestry is an important raw material for industrial production, as well as providing a natural habitat for wildlife. It also helps maintain our national carbon footprint standards and can be harnessed as an idyllic recreational resource. As a result of these uses, the Irish Government has provided tax breaks, premiums, and plantation grants for forestry, when combined make forestry a decidedly attractive investment.

The Department of Agriculture will compensate those planting forestry with planting grants of up to 100 per cent, 10 to 15 year premiums, and tax exemptions from the most onerous of taxes. Forestry grants, premiums, and the sale of thinning and clear fell are all exempt from income tax, in addition to the exemption of income tax on company dividends paid out in respect of woodland. Gains made from the disposal of felled trees are also exempt from Capital Gains Tax.

According to some forestry companies, the price paid for forestry land in Ireland can be up to €12,000 per hectare. Owners of forestry land can avail of capital investment grants for plantation of up to €5,750 per hectare and premiums of up to €635 per hectare for up to 15 years. With the correct afforestation, partially paid for using the aforementioned grant, one can earn up to €9,525 per hectare in premiums alone over a 15 year period before any earnings from the sale of thinnings or clear fell.

If your wish is to have an investment which requires little maintenance, offers tax benefits, and relieves the necessity to chase tenants for rental payments, then one would have to consider forestry as a good investment asset.

BV Commercial Real Estate Advisors is seeking land suitable for forestry plantation for finance approved clients. For more information, contact the commercial team on forestry and agriculture, Gerard Mahon, land, agri, and forestry valuer, at 091 745 240, [email protected], or see www.bvcommercial.ie

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