Ireland has some very attractive growth rates in forestry making investment into this asset class very attractive based on the relatively quick returns available from such a stable commodity.
We have seen a consistent return from Irish forestry plantations from 5% - 7% dependent on a number of factors. with our national coverage, Green Belt always has attractive blocks available for sale or purchase. Please contact us for specific details, highlighting your budget and preferences for your investment.
The options that are available to those looking to diversify their portfolio or looking to secure future pension stability are numerous and not mutually exclusive.
You can choose to invest into 'Green' land and plant from year one through to maturity. An average panting cycle can take 35 years. With a farmer premium your annual earnings average at €208 per acre for 15 years, or if you take all earnings over the lifetime of the plantation, €382 per acre after all costs (insurance, management and so on). Comparing this with the average price received for renting farmland and it's a very attractive proposition.
Farm the Premiums:
An alternative to this and something we are seeing more of recently is the 'farming of premiums'. This is where farmers plant land and realise the annual premiums for 15 years before selling the plantation to an investor. They reinvest their sale returns into new land and repeat the process. Again, the tax breaks and incentives are encouraging for such enterprises. Forestry sales do not incur Capital Gains Tax, nor do they incur Stamp Duty for the new owner. The land is subject to both, however, as the crop is now the most valuable lement the lands value is dramatically reduced. There is no CGT paid on agricultural land sales if the proceeds are reinvested into agriculture.
Semi Mature purchases:
Then there is the other option of purchasing a semi mature plantation – 20 years old for example. Thinning revenues of approximately €200 per acre can be achieved on the first of two thinnings. The duration for the investor to wait before clearfell is significantly reduced therefore returns are quicker and more generous – at least 6% per annum compounded.
Such investment patterns are emerging across numerous investment platforms – individuals, self administered pension funds, institutional investors and company pensions. The returns are consistent, generous and lucrative and there is a strong CSR element to it also. Further to those benefits, the tax treatment of timber and forestry as an asset is attractive. See our Tax Treatment Infographic.
Green Belt have invested more than €28 million for farmers and investors into the above options since our incorporation in 1982. Our network of professional foresters located nationally are perfectly placed to source opportunities suitable for you and to manage your investment through to clearfell and beyond.
Your Forestry, Your Future. Enhanced by our Expertise.