Frequently Asked Questions on Investment in Forestry

What is the typical term for forestry investment?

It can range from 10 years onwards. The options for investment can include semi mature forestry, purchasing 'green land' for planting (attracts grants and premiums, and land is expensive, or buying 'Brown land' for replanting (no grants or premiums but land is less costly)

How Does Green Belt work with me?

Green Belt carries out extensive due diligence on lands or forests that meet your investment criteria. This includes desk top surveys, drone mapping and on site inventory. The data is compiled into a detailed spreadsheet outlining the total income and expenditure across the lifecycle.

What is the typical IRR from a forestry investment?

We realistically predict a 3-4% IRR, compounding, for forestry investments. This is a tax free return, except for USC and PRSI, based on the current rules applying.

What tax is paid on forestry investment?

PRSI and USC are paid on forestry harvesting returns. If you hold shares in a forestry investment, the transfer of shares is taxed, but the income derived from the occupation of commercial woodland is tax free. The forestry crop is not liable to CGT or to Stamp duty. Returns from the occupation of commercial forestry are tax free. Read more on the Taxation including Inheritance Tax in Relation to Forestry and Woodlands

Do I earn anything during the investment term, before clearfell?

You could earn from the tax free annual premiums paid for 15 years on new plantations. Earnings from forestry thinning operations can be paid out as dividends. We can compile a structured forestry portfolio to provide regular dividends to investors.

What value has my forestry in Biodiversity credits?

Nature based solutions are increasingly important for companies with reporting obligations and compliance requirements. Baselining the biodiversity function of the forests or woodland provide data to present in terms of CSRD reporting for example.

What risks is my forestry investment open to?

There are risks from fire, wind and pestilence. These can be mitigated against but can still persist. Forest insurance is recommended and available through Green Belt Ltd. Economically, there are market risks but as timber is best stored on the stump, it can increase in value as the markets recover. With a strategic view of your forestry portfolio, Greenbelt can manage economic risk effectively.

Why is forestry the best investment?

• Low risk to return ratio;
• Biological growth is not impacted by economic factors, it is safe and reliable;
• Generally a negative correlation to stock market indices;
• Traditional risks can be avoided through professional forest management;
• A forest is a tangible asset which is a source of value creation;
• Irish timber has an incredible untapped value for the bioeconomy;
• It is becoming more valuable as Carbon Capture becomes more important.