Has anyone got any information or experience buying a property in Australia (Queensland) where there is already a tree plantation on the acreage? There is a property for sale that has 600 Gympie Messmate trees that were planted 15 years ago, so my questions are: Are there government regulations on what age the trees can be harvested, for example, do you have to wait for EXACTLY 30 years from when the trees were planted, what rules do you have to follow? (This is a question about rules, it is not supposed to open up a debate on when this species is fully mature - 30 years was just an example of time ) Do you have to pay CGT on any profit made from the sale of the trees? What is the norm to do with the acreage after the trees are harvested? Replant the forest or can you just use the clear land as is? (bearing in mind it'll either have 600 stumps or 600 holes in it ) It appears that the vendors have added around $100k to the price of the property due to this plantation, which got me thinking, and raised the above questions in my mind. Seems a bit much to me, to add so much seeing as when the trees are harvested it'll be worth $100k less than we would've paid - so basically you're trying to achieve $100k in timber sales just to break even on what you paid for the property?!? (Rough valuations only, to raise a point) Sorry to ramble - google was NOT my friend in this case. Hope someone can help. Thanks in advance. Dan.
Maybe check to see if this is lease-hold or free-hold as a few in that area are on 100year lease.. The other item with these trees they are Eucalyptus ,and from my experience from nth nsw they burn very quickly … Plus I don't think even with this being a dense timber that 600 trees equal 100k to any local saw mill that would be the first question ,then if the property is lease-hold..imho..
Timber and foresty plantations are a specialised industry. You need to get the trees valued since they are trading stock. GST applies to sale of timber. CGT does not apply to business income. Insuring timber plantations ? LOL. If you dont know the industry then walk away. Rehab costs and replanting IF you are allowed to fell them need to be known. 600 trees is a very small plantation of any species. You may be shocked to learn what the trees arent worth to a mill.
Thanks both for your replies. I should maybe have made it clear that this is not a business ‘opportunity’. This is to purchase a house (2 actually) on 22 acres - This will be our home, the plantation is just a bonus (or not). When I mentioned that they seem to have added 100k to the price, that is a rough guesstimate on the comparison between similar properties in the same area.
I dont share that view. You clearly are buying trees intended to produce income. Its not part of the home. If its not a business it would be a isolated profit making issue with a separate asset being the timber. And there likely is a GST issue on the purchase of the plantation timber as a going concern, with that it could be subject to GST when you buy. Its a supply of timber not residential peemises. It wont pass the residential premises test to be 100% GST free. And if its more than 2HA there is a CGT issue anyway. I would be having discussions with a tax adviser and a lawyer. You could be buying $100K of firewood in advance
I'm buying the property as a home. The trees are there, I'd actually prefer the trees not to be there, but we like the property and the location. The trees and the land are part of the home, under one title.
