Selling forest properties

Things to consider when selling forest property…

The demand for forest properties is high! In recent years, we have seen an increased demand for forest properties with younger forests and high growth. The buyers are often long-term investors who see the forest as a value-preserving investment, sometimes for future generations.

For these buyers, forest growth and inflation are the main drivers of value appreciation. An important reason for this is that the market value per m³sk at sale often exceeds the net value at final felling, especially when considering post-felling planting costs. For these long-term speculators, forest properties are a better investment than extracting returns through annual fellings.

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Important things to consider before selling your forest property:

  • Avoid final felling in the last few years before sale
  • Carry out clearings in affected stands
  • Ensure that forest roads are passable by car
  • Mark property boundaries clearly
  • Ensure all land is planted
  • Establish a new forestry plan
  • Hunting towers and other facilities can provide an extra plus

An updated forestry plan is an important tool when selling forest properties. The plan helps to estimate the timber supply and plan for future measures over the next ten years. For the buyer, it provides security, as they can trust that the timber supply is correctly estimated and that there are no unexpected risks. A new forestry plan can often show a higher timber supply than an adjusted older plan, thereby increasing the value of the property. It may also turn out that the increase in timber volume – even if it is only one m³sk per hectare – more than covers the cost of the planning.

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Should I cut down the forest before selling the farm?

We advise against felling forests before selling. Forest land is priced per cubic meter of forest, including young forests, and market statistics show that selling standing forests usually yields a higher price than what is obtained from felling. In addition, the capital gains tax is lower if the forest is saved: 27% instead of 30% when selling timber. The buyer also has the option of using the “forest deduction” when felling, which makes felling more advantageous for the buyer.

By preserving the forest for sale, you can maximize the value of your forest property and ensure a better deal for both you and the buyer.

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