We had a discussion on slack the other day about air travel. As you all know, it’s one of the most polluting forms of travel. But also a fast way to get around and very convenient to cross big ponds. The dilemma! But what if you could offset some of your carbon emissions? In short, should you buy a forest?
Should you buy a forest?
So the idea is quite simple, you fly a lot and try to compensate your emissions by purchasing a forest. That brings us to a few questions.
- How much money do you need to buy a forest (in the Netherlands)?
- Is buying an forest also an investment?
- Is a forest the right thing to buy?
- If not, what else should you buy?
Buying a Forest
It’s relatively easy to buy a (piece of) forest in the Netherlands. You literally go to “buyaforest.com” (actual site www.bostekoop.nl – Dutch) and you can go bananas. Here you can find anything from just 1.000m² to several hectares. Prices generally range from about €1-1,5/m². Agricultural land usually sets you back around €6/m2. Both are dirt cheap compared to a building plot in the Netherlands, which generally range from €100m² to over €600m²!
But you probably guessed this already, you can’t do much with forest ground. You are not allowed to build on it. Recreation (other than walking through it) is often not permitted either. In short, the only thing you can do is look at it, walk through it and perhaps get some wood from it.
When you buy you have to pay a notary to transfer the title into the your name, this probably costs around €600. Depending on the size and status of the forest, no land transfer taxes are required to be paid.
Is a forest an investment?
In most cases: no. Not really. It depends on what type of forest you buy. A production forest might make you some money… sometimes (see here – Dutch). But it certainly won’t make you rich! According to the article referenced the revenues per hectare were around €281 (including subsidies) for 2016. However the costs for that year where… ahum… €290. Right, might as well not cut down trees!
Nature forests and mixed forests are pretty much useless commercially. But they might provide some return on investment because they make you happy when you walk in them. Different type of ROI ;-). However, you can cut down trees for your own consumption. This will save in heating costs, which might actually be the best financial return on investment! Especially as gas prices will be taxed more heavily in the near future. Plus gas may disappear almost completely by 2050…for heating Dutch houses.
There is one other added bonus. The value of the forest is exempt from wealth tax in Box 3, if big enough & assessed with the right status. This means that you don’t pay any taxes (and no land taxes (OZB) either)! If you transfer the forest to your kids (either when alive or after you passed away), no inheritance taxes are required. Perhaps a way to do estate planning?
Is a forest the right thing to buy?
Except for some personal gains, there don’t seem to be many financial gains. It’s also not easy to sell. Just looking at how long certain plots are being offered. That being said, forest are not very expensive to purchase either.
But more importantly, the idea to invest into a forest came from a carbon emissions perspective. Forests that are mature don’t absorb much carbon. Kind of defeats the purpose! So what could you do as an alternative?
You can manage the forest, as noted in the linke above! If you cut down trees and use for construction, then replant the tree. It does capture more carbon. So perhaps you have to buy a forest and use the trees to build your own house (then those of your neighbours) and replant. Just an idea. Relatively cheap building materials!
Let’s assume you want to maximize carbon capture to offset your emissions. In that case you probably should look at converting a piece of barren land, or agricultural waste land, into an food forest! In this case you can establish significant plant growth. Thereby creating “massive” carbon capture. But it will also generate tons of food for you and your family (albeit that might take a few years).
The other good thing is that this type of forest agriculture is super efficient and takes relatively little effort. This as it uses permaculture techniques to optimize plant growth and food production. A win-win all around. Now just need to find a piece of land that we can convert… In the western part of the Netherlands….. yeah, right. Guess it’s time to move!
Other Should You Buy posts:
Want more fun stuff to read up on? Check out this:
- Should you buy a holiday home?
- Should you buy a yacht?
- Or let’s go crazy: should you buy an island or castle?