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  1. #1
    Join Date
    Jun 2004
    Location
    Newcastle
    Posts
    32

    Default Property Search - Hunter Valley

    Hello All,

    I've stumbled into this area of the forums for the first time and I'm impressed with the posts in here.

    As a little background I'm on the hunt for a suitable property in the Hunter Valley (preferrable lower hunter) to get some timber plantation(s) going. I have been looking for some time and nothing suitable has come up yet, so I continue to wait.

    I have tried and tried to get cetain info out of various govt. departments relating to private forestly and usually get bounced around between people until I give up in frustration (I'm sure this is a policy of most departments )

    So I'll ask a couple of my questions in here and see if anyone has experienced something similar.

    1. Clearing of exisitng areas/scrub.
    A lot of the properties I've looked at so far are pretty rough to say the least. This is to be expected as I'm not after prime grazing land. But what I have trouble finding out is what I have to go through to clear out any areas of scrub in order to set up sites to plant timber. Is this kind of clearing viewed differently from clearing to pasture?

    2. Taxation issues.
    If you set up a plantation with a view to selling the timber there are obviously taxation issues to be considered. What deductions can be made year-by-year as the trees are growing? I have seen a couple of worksheets from the ATO but they all seem to work around the sale of the timber. If you're starting a plantation then this will be many years away.

    Great area of the site guys - I look forward to reading posts in here often.

    Ben

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  3. #2
    Join Date
    Oct 2003
    Location
    Kentucky NSW near Tamworth, Australia
    Age
    85
    Posts
    3,737

    Default

    Ben

    I think you will open a can of worms on both fronts.

    On the clearing issue I would contact the National Farmers Association and on the Taxation issue either contact the ATO or a very competent accountant.

  4. #3
    Join Date
    Aug 2003
    Location
    .
    Posts
    10,482

    Default

    Why do you want to plant timber?
    Is it for an investment?
    Or for the timber?

    Either way I would buy shares in a timber plantation mob if for investment purposes, if its for the timber, Id save the money and just buy the timber.

    Al

  5. #4
    Join Date
    Jun 2004
    Location
    Newcastle
    Posts
    32

    Default

    I guess there are many reasons I'd like to plant the timber. Ideally it would be a foot in the door for a rural landholding (this is something I'm looking to do longer term anyway). If a percentage of the property can be planted out as good timber then great.

    If I was looking for a lot of timber to use myself I wouldn't consider growing it - I have patience but not that much

    I'm not looking to make a lot of money out of the timber- at least not in my lifetime. More to set up a sustainable source of timber (and income) for the future generation(s). With the correct selections of trees I'm certain the value will increase.

  6. #5
    Join Date
    Jun 2003
    Location
    ...
    Posts
    7,955

    Default

    Quote Originally Posted by Benniee View Post
    2. Taxation issues.
    If you set up a plantation with a view to selling the timber there are obviously taxation issues to be considered. What deductions can be made year-by-year as the trees are growing?

    Some 25 years ago the accounting practice I worked for had a number of clients who invested heavily in timber plantations parcels, run and managed by a plantation company in Tassie, in order to obtain tax benefits.

    This was a bona fida plantation operation on a fairly large scale and all our clients had their tax claims disallowed.

    After 6 stressfull years of the objection process the claims were finally allowed, but the strain on a number of clients caused them to lose their business and there were 2 definite family breakups as a result of the financial stress over those years.

    There are many hurdles to overcome to prove to the ATO that it is a genuine business of tree farming and thus obtaining income and being able to claim deductions. Most likely you will only be able to capitalise your expenditure and finally ofset it against any actual income earned at the tree felling stage.

    Only a fool would rush in without obtaining proper accounting advice and verifying your situation direct with the ATO to obtain an tax opinion.


    Peter.

  7. #6
    Join Date
    Jun 2006
    Location
    Sydney NSW
    Posts
    115

    Default

    The Hunter, even the lower Hunter, can be a tough place to grow trees. For good growth rates, especially of tree species regard as commercially valuable (which are often at the rainforest-species end of the spectrum) you need a combination of reliable good rainfall and deep fertile soils. The Hunter region isn't noted for either, although both exist close by on the coast to both the north and south. Check both the rainfall (at least 1000mm pa is best) and the soil (dig planty of test pits to at least a metre deep and look at the profile) carefully before choosing a property. If there are any remnant trees they can often provide a good indicator of what the local soil/rainfall combo can support, both in terms of species and size/form. If the site supports species that specialise in tough conditions (eg forest red gum, E. tereticornis) then keep looking!

    Once you've got a good site, the next step is species selection. Matching the species to the site conditions (soil type, rainfall, aspect, frost incidence etc) is an art, but vitally important for a good result.

    Finally, good site preparation (deep ripping and mounding) and good weed control are musts for good results. Ripping is especially important if the site has been grazed, as the pitter patter of hoofed feet will, over many years, have built up a hardpan layer about a foot below the surface that will seriously hamper root development of the trees, and thus seriously impede growth.

    The regs around land clearing are complex and one man's scrub is another man's threatened ecological community. Seek advice and approval from the local authorities, prosecution may result otherwise. The local Landcare group and the local Catchment Management Authority can both be good sources of informed and relatively impartial advice.

    On tax matters, talk to a good accountant!

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