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Forestry
The purchase of land with either an immature or a mature forest on it is
a specialist purchase. It is critical for both the vendor and the
purchaser that the parties establish exactly what the crop consists of
in terms of age classes, forest areas, volumes of timber and potential
log grades. This can only be achieved by a professional inventory being
provided. Resource consents will need to be checked or obtained. From
the purchaser’s point of view, the purchaser needs certainty that the
planted forest is legally established and that it will be able to be
harvested in the future on reasonable conditions. Harvest planning may
also need to be undertaken as the cost of harvesting has a significant
impact on the future value of the crop. Where access is required through
neighbouring properties, or access is required onto a state highway
traffic management and neighbours’ consent will need to be considered.
It is important to separate the value of the trees from that of the land
as a sale of a forest crop at any point is taxable in the hands of the
vendor and claimable in the cost of bush account of the purchaser.
If the vendor has any development costs in their accounts, these should
be passed on to the purchaser. The purchaser may wish to ensure that the
forest remains under pest control, free of stock and has had any annual
dothistroma spray completed before the settlement date.
Please refer to our
disclaimer.
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