Certificate nr. 126
E-mail: info@mets.ee
SELLING FORESTS
When you sell your forest, choose a knowledgeable transaction partner
Selling a forest is a weighty responsibility and as forest owners people might happen to sell a forest maybe only once or twice during their lifetime. Therefore, the decision to sell is deliberated carefully. Often, the fear is that after selling to a forestry company, the forest will be clear-cut and the land will be abandoned. When you sell forest land to us, you can rest assured that your forest will be in great hands. We have over a quarter of a century of experience in managing forests and if we purchase an immovable, we will maintain and manage your immovable responsibly.
- Our price offer will be based on a professional surveying of the forest which will ensure that the owner gets a fair and appropriate price;
- A personal approach based on the client’s needs – for example, when you sell a part of the immovable, we will help arrange land surveying;
- A fast transaction – when we reach an agreement, we will prepare all documents required for the transaction;
- Before the transaction, we will transfer the sum to a deposit account;
- There are no commission fees;
- We will pay the notary’s service fees.
When you want to sell, we will carry out an inventory on your land
Working regions of inventory specialists – click on the map to see who will come to visit your forest
The sales process of a forest
Initial contact
Fill in the price enquiry form or call us. We will get in touch and specify the data about the forest.
We will visit the forest
Our specialist will do fieldwork and estimate the value of your forest
We will make an offer
We will make you the best offer possible to purchase your forest land.
We will sign a sales and purchase contract
If our offer is suitable, we will prepare the contract and arrange the transaction with a notary. Payment will happen when the sales contract is signed.
Selling the cutting right or forest land?
If the owner doesn’t see themselves managing the forest in the future, the most reasonable and profitable thing to do is to sell the forest together with the land. Selling an immovable will entail few risks for the owner because the transaction is notarial and one-time. It is worth considering selling if:
- The immovable is far from the place where you live;
- Maintaining and managing the forest is too much for you (managing even small forest holdings is a challenge if you lack the equipment and time for it);
- The immovable is located on a nature conservation area or where restrictions apply (interpreting legal acts makes management difficult);
- It is a forest that has little productivity (e.g. a paludified forest which is permanently waterlogged, it doesn’t grow or regenerate).
If you have interest and knowledge about silviculture and reforestation, you might prefer to sell the cutting right, thus leaving your children and grandchildren the opportunity to earn income again. In order to sell the cutting right, you need up to date inventory data and to submit a forest notification to the Environmental Board, on the basis of which a transfer deed of cutting right is signed. When selling the cutting right, you need to take into account that according to the Forest Act, the owner is obligated to ensure the reforestation of the forest land within 5 years of conducting regeneration cutting and you need to pay income tax on the sales profit.
Income tax on selling forest land
Here, you need to mind how the immovable has been acquired. If the land has been received during the ownership reform or restituted land has been inherited, then selling the farmland for the first time is exempt from income tax.
If the forest land has previously been bought already, income tax will apply on the profit earned based on the previous purchase price and today’s sales price. When you sell immovables that were gained via a gratuitious contract, income tax applies to the whole income from the sale of land.
Factors affecting the sales price of a forest
Since a forest consists of the value of land and the value of standing timber, the value of a forest is affected by various factors, e.g. the location of the forest land, the fertility of the forest land and its surface area. The price of a forest is significantly influenced by the tree species growing there, their volume, age and health. Also, what matters is the market value of forests at the time of the transaction, meaning what is the ratio of demand and supply on the market.
Selling a forest immovable requires finding the best buyer
When you sell a forest immovable, we recommend selecting a professional company and avoiding mediators. You should first do a thorough background check – check the existing immovables in the Land Register and the company’s tax debts in the Business Register, search the internet to find out more about the background of the company and related parties. It is not always a good idea to accept the very first offer, instead we recommend getting price quotes from several forestry companies.
When you sell the cutting right, we recommend observing whether the buyer has high quality equipment and professional specialists. When you are marking the territory for felling, the owner should always be present. Together with marking the borders, the best seed trees and old crop trees are selected. It is always better for the contract for the transfer of the cutting right to be detailed rather than vague. This will leave less room for interpretation in case any problems should arise in the future.
You can also use a forest auctioning environment for forest transactions, but here the forest owner needs to take into account that at least 5-8% of the final income will go to the auctioneer. When the owner decides to use an auctioneer, first the reliability of the organiser of the auction needs to be ensured. We recommend the timber.ee auctioning environment where the processes are clear and transparent for the buyer and seller both.
Are you selling a forest? Contact us!
Would you like to find out more about forest transactions?
How much does forest land cost?
The price of a forest is the most complicated question for the owner of the forest land. When determining a purchase price, the most essential factors are the forest land’s location, the fertility of the soil and its surface area. The price of standing timber is most affected by the tree species growing there, their volume, age and health. Additionally, the market value of forests is significantly influenced by demand and supply on the market – are there more or fewer offers than the forestry company’s current capacity to invest.
What does selling a forest actually mean?
The sale of forest land is a notarised form of selling a forest where the forest land is sold together with standing timber. The notarised forest sales transaction is the most secure way the seller of the forest can earn income. In addition, many forest owners are exempt from paying income tax when selling the land if the land was gained during the ownership reform or they inherited a plot of restituted land.
How much does a hectare of forest land cost?
Many forest owners wonder what the average price of a hectare of forest is in order to use it to estimate the value of their forest immovable. Such an approach, however, often yields a misleading result. The price of one hectare of forest land might be 1,000 EUR when the forest land has been cleared and the soil’s fertility is low. At the same time, one hectare of forest land can cost more than 20,000 EUR when a coniferous forest grows there which has high quality and many reserves. It is easy to say what the average price of one hectare of forest land is based on its surface area and soil when the plot is treeless. However, it is difficult to estimate the value when the forest land is covered with a forest that is growing continuously. To do so, it is first necessary to review the silviculture survey data or to go and survey the standing timber at that point of time.
What does selling a forest together with land actually mean?
The sale of a forest together with land means that a notarial sales and purchase contract has been signed as a real right contract or a contract under the law of obligations. A real right contract is a classic sales and purchase contract where the relevant amount is paid immediately and the property changes hands. A contract under the law of obligations is used in such cases, for example, where a part of the immovable is left to the seller and land surveying operations are in the planning phase. When a contract under the law of obligations is signed, the conditions for the sale and the price are determined and in most cases the total sum of the transaction is transferred immediately.
Why do we use a notary’s deposit account when buying an immovable?
When selling forest land as well as farmland, the safest option is to transfer sales and purchase sums using the notary’s deposit account. This deposit account is the notary’s bank account where the notary will deposit the transaction sum until the contract has been signed and after concluding the transaction, the sum will be transferred to the seller.
What is a forest notification?
A forest notification, also known as a cutting notification, is a document that contains an overview of the felling activities that are planned for the forest immovable. The notification needs to be submitted to the Environmental Board. It is not necessary to submit a cutting notification if the intended scope of felling is less than 20 solid cubic metres per year per immovable. If the cutting right was sold, the cutting license is a prerequisite for a contract together with valid forest inventory data from the Forest Register. When it comes to selling land, the forest notification and inventory data are not essential prerequisites for signing a sales and purchase contract for the immovable.