A change of forest ownership requires a decision by the forest owner to give up their forest and a choice of how the change of ownership is carried out. The recipient of the forest must prepare for their new role as a forest owner and first consider whether they want to own the forest.
This page provides you with a concise overview of the change of ownership. More information on the change of ownership in Finnish.
Important measures in a change of ownership
A change of ownership of a forest property involves obligations that must be fulfilled by both the new and the former forest owner.
It is advisable to have many of the documents prepared by service providers specialising in change of ownership.
New forest owner
The obligations of a new forest owner include
- Applying for a title registration
- Forest owner’s tax return and payment of taxes
- Notification of starting a business subject to VAT
- Familiarisation with the obligations of forestry subsidies received
- Notifying the necessary parties of the change of ownership
Transferor of forest property
The obligations of a former forest owner include
- Transferor’s tax returns and tax payments
- Notification of termination of VAT-liable activities
- Termination of contracts
Determining the value of a forest property
Forest property valuation is generally needed whenever a forest changes owner. When a forest property is transferred to a new owner, it is a good idea to use the help of specialists.
The value of the forest property is used to calculate any inheritance or gift tax, so it is important to be familiar with the Finnish Tax Administration’s instructions on determining the value. Valuation also helps to set a price expectation for a forest property to be sold.
The value of a forest property can be determined in three different ways:
- Based on a property assessment prepared by a forest professional
- Using online applications based on forest resource data
- Using the estimated regional values of forest land published annually by the Tax Administration
Different valuation methods may give very different results on the market value of a forest property, and the appropriate method depends on the type of forest property.
A change of ownership can be arranged in different ways
Change of ownership as a transaction
A forest property may be sold at fair value or as a gift. A transaction is a suitable method of transfer also between close relatives, in situations where the transferors need money from the forest property for living or buying a home, for example.
Change of ownership as a gift
Transferring a forest property as a gift is a good option, in situations where the transferor does not need to receive a purchase price for the forest. The gift is also suitable for situations where there is only one heir or if other heirs are donated property other than forest.
The received gift is taxed in accordance with the gift tax provisions.
Change of ownership of a forest property due to inheritance
Forest properties often change owners through inheritance after the death of the previous owner. Inheritance is subject to inheritance tax and gift tax provisions.
The general recommendation is to settle the estate at an early stage. When making decisions on the ownership arrangements of an estate, beneficiaries have several options. Before making a decision on the ownership arrangement, it is important to consult all beneficiaries and consider how the ownership situation would change, in practice.