Timber Plantations

[Glenn]

I was wondering if it is feasible to buy say, 200 hectares of cleared land with a view to planting trees that are sought after by timber companies.

Upon the plantation maturing to the point of it being feasible to harvest, the whole property could be onsold to a timber company. If this property was also a PPOR, it could be a very nice (tax free) way to fund a retirement that is around 20 years away.

Any thoughts?

Glenn

 

[doreilly]

You would want to get an ATO ruling that the "investment" is tax deductible.

 

[Dazz]

If this property was also a PPOR

I believe the ATO places an upper limit on the amount of land that a PPoR can constitute. Currently it is 2Ha surrounding the main residence (4.942 acres).

Everything outside of this relatively small zone....when you are talking big acreage....is classified as an IP and is fully up for CGT.

 

[Glenn]

Profitable trees

Does anyone know what sort of trees become most profitable to timber companies here in Australia?

Glenn

 

[geoffw]

There are probably profitable agricultural opportunities out there. You have to find a niche. Timber comapnies have been doing these schemes for very many years.

A friend a few years ago was looking at truffles. As it turned out, his property did not suit. So he went instead into another area- something potentially extremly lucrative. He had the capital to back him up. And he had done a huge amount of research into the products, possibilities, and profitability. It will take a number of years for the trees to reach maturity. And there may not ever be a market.

But if only 70% of the things go wrong, he could still do extremely well.

He's taking a big plunge. The risk is extremly high. But so are the rewards.

 

[RichardC]

200 H is a awful lot of trees. I doubt you could plant 5% of that.

The original planting is quite dense. You do this to control weeds mainly, I think. First thinning is after 4-5 yrs and if you get a contractor to do it, you won't see any profit. There is another thinning before final harvest.

Hoop pine and eucalypt are the most common/fastest growing and may have a cycle of 20yrs but the better cabinet timbers can take twice as long.

I have only a superficial knowledge of these things but your state forrestry/primary industries department should be very helpful. Our's in Qld is.

If you're after a tree change, check out the Atherton Tablelands and Ravenshoe. I was looking at 40 acres with tallow wood on some of it. Pretty good value I thought.