Selling a forest requires a thorough understanding of the financial, legal and tax aspects of forestry investments.
This article outlines the factors you need to take into account when planning to sell a forest or woodland.
First of all, you need to define the selling price of your forest. You can refer to the section on forest prices in our buyer's guide.
But because there are so many criteria to take into account when valuing a forest, it will no doubt be very useful to supplement your approach with that of professionals, whether forestry experts or estate agents.
These professionals very often have a file of buyers that can enable you to move very quickly. Forest owners' associations and forestry cooperatives can also provide you with information about proposed purchases.
Many of these professionals and organisations post their ads on ma-propriete-forestiere.fr, which is now a popular site with many buyers. You can publish your advert directly on our portal or ask one of our advertisers to help you with your sale.
There are several preferential or pre-emptive rights that may apply to the sale of a wooded parcel. The notary responsible for finalising the deed must notify each beneficiary of a right prior to the sale, failing which the deed will be null and void.
In the event of the sale of a wooded property of less than 4 hectares, classified in the land register as woods and forests, the owners of adjoining wooded plots have a preferential right.
To enable neighbours to exercise this right, the notary will inform neighbouring owners either by registered letter with acknowledgement of receipt, or by posting a notice in the town hall if there are more than 10 neighbours.
Once they have been informed, these neighbours have a period of 2 months in which to purchase the property at the price and under the conditions indicated by the vendor.
The municipality in which the forest is located has the same preferential right as neighbours of adjoining plots.
It should be noted that in the event of multiple buyers between neighbours and the local authority, it is the owner who is free to choose to whom to sell his or her property.
The right of pre-emption is granted to municipalities holding an adjoining parcel of woodland subject to a management document.
The right of pre-emption differs from the right of preference in that it allows the beneficiary to definitively replace the initial purchaser without the seller being able to withdraw from the sale.
The state has a right of pre-emption if a state-owned forest adjoins the plot for sale.
In principle, the SAFER has no right of pre-emption over wooded plots.
However, it does have a right of pre-emption in the event of the sale of mixed property, i.e. the simultaneous sale of wooded and non-wooded plots. However, the purchaser may keep the wooded plots if the price of these plots is expressly mentioned in the notification.
SAFER also has a right of pre-emption in the following cases:
Finally, since 2017, SAFER has had a right of pre-emption over forests in the Ile-de-France region, with the aim of combating the urban sprawl of forest areas in the region.
Although forestry taxation is special, the methods for taxing capital gains on the sale of a parcel of woodland are standard.
Capital gains generated on the sale of woodland and forests are subject to property capital gains tax. However, if the forest owner is considered to be a professional, the capital gains will be taxed as professional capital gains, a regime that we will not be examining in this article.
Calculating capital gains: Capital gains are the difference between the initial purchase price (increased by the costs incurred at the time of purchase) and the sale price (increased by the costs incurred by the seller).
Capital gains are taxed at 36.2%, an overall rate that includes :
Allowances are applied to each of these taxes:
Applying these allowances results in total exemption after 30 years of ownership.
Exemption for sales of less than €15,000: Sales of property for less than €15,000 are exempt from capital gains tax. In the case of sales to separate purchasers, the €15,000 threshold must be assessed on a purchaser-by-purchaser basis. If several cadastral parcels are sold to the same buyer, the €15,000 threshold will be assessed on a parcel-by-parcel basis for non-contiguous parcels. For contiguous plots, this threshold applies to the price of all these plots.
This capital gains tax system applies to both private owners and Groupements Forestiers (unless they have opted for corporation tax).
If you have benefited from the tax advantages associated with the IFI or transfer duties (Monichon regime) and you sell your forest before the end of the 30-year commitment period, you will have to transfer your obligations to the future owners of the property, with a commitment to provide you with information on the management of the future property, so that the taxpayer can then submit his ten-year reports on good management.
The sale of shares in a Groupement Forestier benefits from preferential treatment, as the deed is registered with the tax authorities at a fixed cost of €125 (compared with 5% for other property companies). This tax saving benefits the buyer, not the seller.
Demand for forests for sale is very strong in France, and there is no doubt that you will quickly find a seller if your selling price is in line with market prices.
You should, however, bear in mind the particularities of existing preferential rights and rights of pre-emption, and take into account the tax impact on the capital gain realised.
