Timber! Potential Pitfalls When Purchasing Private Managed Forest Land In British Columbia

Prospective purchasers of private managed forest land in British Columbia (land classified as "Class 7 Private Managed Forest Land") should be aware that:

• future property assessments for the land may be higher than the purchaser is expecting on account of timber previously harvested on the land; and
• the purchaser may incur exit fees if the purchaser removes the property from the Private Managed Forest Land class.

BC Assessment values private managed forest land based on the land's bare land value, but also on the added value of the timber situated on the land. Importantly for a prospective purchaser, the timber value only becomes assessable when it is harvested, which creates a lag a purchaser may not identify until after closing. For example, timber harvested in the 2013 calendar year will not appear on the assessment notice for the underlying land until the 2015 assessment roll. Accordingly, a prudent purchaser of private managed forest land will require a