a tool for diversification and tax exemption

Do you want to diversify your wealth? Are you looking for a stable and profitable investment? Well, why not invest in the forest? In this article, we offer you an overview to know all about investments in forestry and their numerous benefits

In recent years, we see that more and more French people want to invest in forests. And they are right, because the forest sector benefits from a growing market with strong investment potential! You probably didn’t know, but France is the fourth largest European country forest area.

It is estimated that today in France there are almost 17 million hectares of forest, which is more than 30% of France. And given the current environmental situation, these 17 million hectares are the subject of a colossal development policy.

In addition, this is evidenced by the average price per hectare of forest, which has almost doubled in 20 years! Therefore, it is not surprising that the forestry market has become a new Eldorado for investors …

Keep in mind that investments in forestry can be made in two different ways. You can invest in the forest directly or invest through forestry groups.

Invest in a living forest

This first option, in particular, is to purchase private forestry from a private owner. Why a private forest domain and not a public one, you ask me? Well, for the simple and compelling reason that state forests are at the disposal of the state and they are not put up for sale.

The only small disadvantage of direct investment in forestry is that there are not many offers on the market. Moreover, buying wood directly is not always available to all wallets. It should be noted that the amount of transactions is usually several hundred thousand euros.

Investing in forests through forestries

Forestry groups work in much the same way as real estate STIs. These are management companies that own one or more forest plots, which allow private investors to buy forest shares. Depending on your goals, you can invest in either group of forest lands (GFF) or in a forestry investment group (AFS).

GFFs are more limited because capital is closed with a certain number of subscriptions. GFIs, for their part, have the advantage that they are more affordable because they operate on the principle of savings. In both cases, forestry groups allow you to invest in the forest at a lower cost because you can invest there together.

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What are the benefits?

However, forests generate income, in particular through the lease of hunting and logging. But you should know that investing in forestry is not necessarily the most important profit. Medium-sized forests give only 2% of the annual harvest. Investors are more interested in the revaluation potential of French forests.

According to the forestry of the deposit and consignment fund, the value of one hectare of forest grows by more than 3.5% every year. Do you know what is even more interesting? This is because the maximum price offered on the market can sometimes exceed the minimum price by 20 times!

So if you are planning to invest in the forest very soon, know that it is not too late. According to many experts, prices may even rise in the coming years.

It is worth noting, for example, that for the Paris Olympics, scheduled for 2024, more than half of the Olympic villages will be built mostly of wood. Therefore, we can already expect that the French forests will be extremely tense in the next few years. And as you probably already know, when demand exceeds supply, prices inevitably rise …

What is taxation?

But far beyond the potential for revaluation, investment in forestry is particularly valued because of its numerous tax benefits. You may not know it, but buying timber directly or through forestry groups can benefit from a tax reduction of up to 18%.

Having issued insurancestorm risk”You can also deduct up to 76% of your income tax contributions. But this is not the end of the tax exemption scheme proposed as part of the forestry investment! Under certain conditions, you can receive a tax rebate of up to 75% of the value of the forest when calculating the ISF.

Please note that this 75% tax exemption also applies to the calculation of inheritance and gift tax.

Buying a forest: a good plan or a bad one?

Acquisition of a good forest or bad plan

If you’re looking for a high-yield investment in a safe haven with an immediate return, well, you obviously won’t like investing in forestry. This type of investment rather rhymes with “security“and”stability”.

It is important to remember that investing in a forest means investing for a very long time in the hope of gaining additional value during the revaluation. Therefore, we should consider this type of investment more as a tool for asset diversification than anything else.

In general, people who are heavily taxed and want to benefit from a better tax exemption are primarily interested in investing in the forest.