Question from a reader:
I own a forest in the countryside, but I’m concerned about the property tax and am thinking of letting it go. Recently, a Chinese person offered to buy everything for three times the market price, and I’m considering selling. I have other land as well, so I’m also contemplating selling that. How is everyone handling inheritance planning?

Property Tax and Inheritance Planning: Advice from My Experience

Hello! Today, I want to talk about property tax and inheritance planning for those who own forests in the countryside. I used to own land myself, so I’ll share my experiences along the way.

Concerns about Property Tax

First, let’s discuss property tax. Owning a forest in the countryside can actually incur quite a bit of tax just for holding it. One day, while I was thinking about my rural land, I felt, “If I keep this, the taxes will be a burden.” Especially with forests, maintaining them costs money, and it’s frustrating to pay taxes on something that isn’t being utilized. The person asking the question mentioned receiving an offer from a Chinese buyer to purchase at three times the market price. This could be a very lucky opportunity. Of course, when selling, it’s essential to consider the market value, but receiving such a high offer is rare, so it’s worth carefully considering.

Points to Consider When Selling Land

When letting go of land, there are several points to keep in mind. First, check the reasons why the selling price is higher than the market value. For example, if the land is in an area where the buyer is considering development, there may be potential there. However, it’s crucial to confirm whether that development will actually happen and what conditions might be attached. Additionally, tax implications must be considered. There may be capital gains tax from the sale of the land. It’s advisable to consult a tax professional to discuss what measures to take regarding this.

The Importance of Inheritance Planning

Now, I also want to touch on inheritance planning. Having faced inheritance issues myself, I understand your concerns well. Matters like estate division and inheritance tax can easily lead to family disputes, so it’s important to think about strategies early on. For instance, “creating a will” is one effective method. I have experienced fewer troubles during inheritance because my parents left a will. A will clearly expresses one’s intentions and is a consideration for the family.

Specific Methods of Inheritance Planning

Now, let’s look at some specific inheritance planning strategies.

1. Creating a Will

As mentioned earlier, having a will can significantly reduce conflicts during inheritance. Whether it’s a notarized will or a handwritten will, it’s reassuring to consult with a professional when creating one.

2. Gifts Given During One’s Lifetime

Gifting during one’s lifetime is also a very effective strategy. For example, by gifting land to children or grandchildren early on, you can reduce the burden of inheritance tax. However, there may be gift tax implications, so it’s best to proceed with the advice of a professional.

3. Organizing Real Estate

Organizing the land you own is also important. Especially if you have land that is not being used or is difficult to maintain, letting go of it can be a viable option. In my case, by selling unnecessary land, I reduced management burdens and lowered my property tax.

4. Utilizing Insurance

Using insurance as a strategy for inheritance tax is another option. By taking out life insurance, you can secure funds for paying inheritance tax, which provides peace of mind for the family.

Conclusion

Owning land or forests comes with property tax and inheritance issues, but with the right knowledge and preparation, it is possible to manage these effectively. The land sale the questioner is considering could yield good results if approached carefully. Moreover, taking action early regarding inheritance planning is crucial. From my own experience, discussing matters with family early and proceeding with necessary procedures can help avoid future troubles. I hope this has been helpful for your life and family. If you have any other questions, please feel free to ask!