The recent spate of super-rich individuals and their associates buying up farmland has highlighted a key feature of Ireland’s land market – if you have enough money, you can buy what you like.
Aside from compulsory purchase orders for public infrastructure, there has been minimal State intervention in the Irish land market since the Land Commission ceased buying land in the early 1980s. Today, land sales are dictated solely by the purchasing power of prospective buyers.
In fact, a 2022 study by the European Commission’s Joint Research Centre (JRC) found that Ireland has the least land regulation compared to all other EU member states.
The JRC found a wide range of land market interventions throughout member states, ranging from heavily regulated countries such as Hungary, to “light touch” states such as Ireland, Denmark and Finland.
Here, we look at the land market restrictions and interventions in place in some European countries.
Hungary: major restrictions on land prices, farm buyers and size of land banks
Hungary has one of the most restrictions on farmland ownership in Europe. Since 1994, the Land Act prevents companies from buying land and sets a maximum sale price for land.
For agricultural land, the maximum price is index-linked to the profitability of agricultural production over a 20-year period and for forestry, it is index-linked to a 50-year profitability calculation. The maximum sale price also references prevailing prices in the locality.
While all EU and Hungarian citizens can buy 1ha of land without restrictions, only registered farmers can acquire more than 1ha. Farmers can acquire 300ha of land, but are limited to a maximum of 1,200ha, with a higher maximum of 1,800ha for livestock farms and seed growers.
There is a long list of potential buyers who get pre-emptive rights when land is sold. First in line is the state, followed by co-owners, the farmer who has been using the land for at least three years, or a neighbour.
There is also priority given to family farmers, young farmers and new entrant farmers, if all prospective buyers are on the same ranking.
State land of more than 3ha is sold through auction and there are maximum sale prices set for state land sales.
The Hungarian aim is to ensure fair allocation and access to agricultural land, curb speculative pressures on the land market, maintain rural populations, conserve rural landscapes and create viable farms for food production.
However, both the European Commission and the Court of Justice of the European Union have been scrutinising Hungary’s Land Act in recent years because it has been criticised as preventing free settlement and free movement of capital.
France: local land agencies limit land buyers
France has one of the most regulated farmland markets in the European Union. The sale of agricultural land has been regulated for over 60 years through the Société d’Aménagement Foncier et d’Etablissement Rural (SAFER), translated as the Land Development and Rural Establishment Society.
A SAFER is a publicly limited non-profit company, supervised by the agriculture and finance ministries, which restricts who farmland can be sold to. Their roots lie in the 1960 Agricultural Orientation Laws which were influenced by the young farmer organisation, the Centre National des Jeunes Agriculteurs (CNJA), which was alarmed by land being sold to developers.
The laws set out to modernise and increase the contribution of agriculture to the French economy, to ensure that farmers were not economically disadvantaged when compared to other professionals, and to protect, and expand, family farming.
State officials and farmer representatives would agree minimum and maximum sizes for modern family farms. The SAFER in each region was then given the power to buy, hold, and sell farmland, and also the right to pre-empt other potential buyers for farmland, under certain conditions.
Today, a SAFER agency in every ‘départment’ or state of France monitors farmland sales and intervenes, when needed, to ensure the objectives of the 1960 law. Typically they act as intermediaries in land sales, choosing who to sell the land to, rather than the land simply always going to the highest bidder.
In some cases, the SAFER may decide to buy the land itself for a fair market value. It will then seek submissions from prospective buyers who can make a case for why they should be permitted to buy it to a regional committee.
Typically, young new entrant farms and family farms wishing to expand are given priority to buy. Since 2014, priority must be given to organic farmers who want to buy land that was already farmed organically. SAFERs also increasingly play a role in environmental protection and local authority land projects.
Figures from 2012 show that in a total land sales market of 490,000ha, the SAFERs intervened on 86,000ha or 18% of the land sold. Within this, the majority (79,400ha or 91%) was by way of facilitating private sales and SAFERs used their pre-emptive powers to buy the remaining 6,600ha (8%).
Ultimately SAFERs regulate land prices, keeping them within reach of farmers and farm incomes. By having the power to mediate and intervene in land sales, they can also prevent large swathes of agricultural land from being bought by speculative non-farming investors. However, they have less control over the transfer of farmland operated by farm companies, an increasing feature of French agriculture.
Spain: no need to covet thy neighbour
When farmland goes up for sale in Spain, neighbouring landowners have pre-emptive rights to buy it under certain conditions.
The adjacent landowner has pre-emptive rights to buy land if the landowner owns ‘priority’ land (full-time farm owned and operated with restrictions on labour income) if the block being sold is below a certain minimum farm size, and if by acquiring the plot, the new owner would reach a minimal agricultural size or more.
If none of the neighbouring landowners could achieve the minimum farm size by acquiring the land, then the one with a largest amount of existing land is first in line to buy.
Neighbouring landowners also have pre-emptive rights for blocks of less than 1ha. Tenants, co-owners and co-heirs also hold pre-emptive rights. If land is bought using pre-emptive rights, then it cannot be sold again for at least six years.
The subdivision or breaking up of farms into separate lots to sell is regulated in Spain, with the exact rules depending on the area of Spain and whether the land is irrigated or not.
Italy: prospective farm buyers must get in line
Farm sizes in Italy range widely, with a very high number of small farms, resulting in an average farm size of 9.5ha in 2016. Government policy has been to increase the average farm size.
Like Spain, when agricultural land is sold, there are pre-emptive rights that govern who can buy it. In Italy, the priority goes to:
The co-owner.The tenant (where a rental contract has been in place for at least two years).The neighbouring farmers, as long as they are ‘family-based farmers’ or ‘professional farmers’ under Italian law.‘Family-based farmers’ are defined in law as farmers who, along with their family, spend at least one-third of their working hours on the farm, and a minimum of 104 days per year. Farming must be their main working activity and source of income.
‘Professional farmers’ must spend at least 50% of their working hours on the farm and rely on farming for at least 50% of their income.
They must also hold agricultural education qualifications or have spent at least three years working as an entrepreneur in the farming sector.
Lithuania: rules to land ownership – but also exceptions to the rules
The number of small farms, particularly those under 10ha, has been falling in Lithuania, while the number of large farms over 100ha has been rising.
In 2020, the average farm size was around 19ha. Buyers from outside Lithuania cannot buy more than 10ha of agricultural land.
Individuals and companies that want to buy farmland in Lithuania must get permission from its National Land Service.
Pre-emptive rights are given to co-owners, tenants, neighbouring landowners, farmers (natural or legal persons) who farm land in the municipality or neighbouring municipality, and the state.
Existing landowners and ‘related persons’ can increase their land holdings in Lithuania, as long as the total amount of land acquired from the state doesn’t exceed 300ha and their total land ownership does not exceed 500ha.
Related persons include the spouse, parents, children and others legally connected. However, despite these rules, there are high-profile examples of people and companies owning significantly more land than these rules should allow.
Lithuanian politician, agronomist, and, ironically, former chair of the Lithuanian Peasants Party, Ramunas Karbauskis, is said to own up to 24,000ha of land through his Agrokoncernas company, which is a seed, fertiliser and plant protection business. Other large landowners include agricultural companies, business people and investment funds with reported land holdings of over 5,000ha each.
In July 2020, government legislators in the Lithuanian Seimas pledged to strengthen the control of the transfer of agricultural land and prevent the acquisition of more agricultural land than is permitted by law.
Netherlands: buy and sell at will, but strict protection for tenants
The Netherlands has no restrictions on the buying or selling of agricultural land and there are no pre-emptive rights for anyone to buy land like those that apply in some other European countries.
There are no residency requirements, no need to be established in the country and no requirement to hold any professional qualifications to buy land. Neither are there any maximum or minimum limits on the sales price of land or the maximum size of a farm.
However, there have been traditionally strong protections in place for tenants on land. Regulated tenancy contracts for farms set out a maximum rental payment and a minimum duration (12 to 26 years). Tenancies were automatically renewed and could be inherited. Breaking a tenancy could only occur under strict conditions, such as if the owner wants to cultivate the land themselves.
Since 2007, deregulated or liberalised tenancy agreements have become more popular, with a much shorter maximum contract length of six years and significantly fewer rights for the lease.
More recently, environmental targets have been to the fore of heated land use debates in the country.
Last year, the Netherlands secured the backing of the European Commission to spend €1.5bn buying out livestock farms in Natura 2000 areas. Two schemes were approved to entice dairy, pig, veal and poultry farms to close, in an effort to reduce nitrogen emissions in certain parts of the country.
The recent spate of super-rich individuals and their associates buying up farmland has highlighted a key feature of Ireland’s land market – if you have enough money, you can buy what you like.
Aside from compulsory purchase orders for public infrastructure, there has been minimal State intervention in the Irish land market since the Land Commission ceased buying land in the early 1980s. Today, land sales are dictated solely by the purchasing power of prospective buyers.
In fact, a 2022 study by the European Commission’s Joint Research Centre (JRC) found that Ireland has the least land regulation compared to all other EU member states.
The JRC found a wide range of land market interventions throughout member states, ranging from heavily regulated countries such as Hungary, to “light touch” states such as Ireland, Denmark and Finland.
Here, we look at the land market restrictions and interventions in place in some European countries.
Hungary: major restrictions on land prices, farm buyers and size of land banks
Hungary has one of the most restrictions on farmland ownership in Europe. Since 1994, the Land Act prevents companies from buying land and sets a maximum sale price for land.
For agricultural land, the maximum price is index-linked to the profitability of agricultural production over a 20-year period and for forestry, it is index-linked to a 50-year profitability calculation. The maximum sale price also references prevailing prices in the locality.
While all EU and Hungarian citizens can buy 1ha of land without restrictions, only registered farmers can acquire more than 1ha. Farmers can acquire 300ha of land, but are limited to a maximum of 1,200ha, with a higher maximum of 1,800ha for livestock farms and seed growers.
There is a long list of potential buyers who get pre-emptive rights when land is sold. First in line is the state, followed by co-owners, the farmer who has been using the land for at least three years, or a neighbour.
There is also priority given to family farmers, young farmers and new entrant farmers, if all prospective buyers are on the same ranking.
State land of more than 3ha is sold through auction and there are maximum sale prices set for state land sales.
The Hungarian aim is to ensure fair allocation and access to agricultural land, curb speculative pressures on the land market, maintain rural populations, conserve rural landscapes and create viable farms for food production.
However, both the European Commission and the Court of Justice of the European Union have been scrutinising Hungary’s Land Act in recent years because it has been criticised as preventing free settlement and free movement of capital.
France: local land agencies limit land buyers
France has one of the most regulated farmland markets in the European Union. The sale of agricultural land has been regulated for over 60 years through the Société d’Aménagement Foncier et d’Etablissement Rural (SAFER), translated as the Land Development and Rural Establishment Society.
A SAFER is a publicly limited non-profit company, supervised by the agriculture and finance ministries, which restricts who farmland can be sold to. Their roots lie in the 1960 Agricultural Orientation Laws which were influenced by the young farmer organisation, the Centre National des Jeunes Agriculteurs (CNJA), which was alarmed by land being sold to developers.
The laws set out to modernise and increase the contribution of agriculture to the French economy, to ensure that farmers were not economically disadvantaged when compared to other professionals, and to protect, and expand, family farming.
State officials and farmer representatives would agree minimum and maximum sizes for modern family farms. The SAFER in each region was then given the power to buy, hold, and sell farmland, and also the right to pre-empt other potential buyers for farmland, under certain conditions.
Today, a SAFER agency in every ‘départment’ or state of France monitors farmland sales and intervenes, when needed, to ensure the objectives of the 1960 law. Typically they act as intermediaries in land sales, choosing who to sell the land to, rather than the land simply always going to the highest bidder.
In some cases, the SAFER may decide to buy the land itself for a fair market value. It will then seek submissions from prospective buyers who can make a case for why they should be permitted to buy it to a regional committee.
Typically, young new entrant farms and family farms wishing to expand are given priority to buy. Since 2014, priority must be given to organic farmers who want to buy land that was already farmed organically. SAFERs also increasingly play a role in environmental protection and local authority land projects.
Figures from 2012 show that in a total land sales market of 490,000ha, the SAFERs intervened on 86,000ha or 18% of the land sold. Within this, the majority (79,400ha or 91%) was by way of facilitating private sales and SAFERs used their pre-emptive powers to buy the remaining 6,600ha (8%).
Ultimately SAFERs regulate land prices, keeping them within reach of farmers and farm incomes. By having the power to mediate and intervene in land sales, they can also prevent large swathes of agricultural land from being bought by speculative non-farming investors. However, they have less control over the transfer of farmland operated by farm companies, an increasing feature of French agriculture.
Spain: no need to covet thy neighbour
When farmland goes up for sale in Spain, neighbouring landowners have pre-emptive rights to buy it under certain conditions.
The adjacent landowner has pre-emptive rights to buy land if the landowner owns ‘priority’ land (full-time farm owned and operated with restrictions on labour income) if the block being sold is below a certain minimum farm size, and if by acquiring the plot, the new owner would reach a minimal agricultural size or more.
If none of the neighbouring landowners could achieve the minimum farm size by acquiring the land, then the one with a largest amount of existing land is first in line to buy.
Neighbouring landowners also have pre-emptive rights for blocks of less than 1ha. Tenants, co-owners and co-heirs also hold pre-emptive rights. If land is bought using pre-emptive rights, then it cannot be sold again for at least six years.
The subdivision or breaking up of farms into separate lots to sell is regulated in Spain, with the exact rules depending on the area of Spain and whether the land is irrigated or not.
Italy: prospective farm buyers must get in line
Farm sizes in Italy range widely, with a very high number of small farms, resulting in an average farm size of 9.5ha in 2016. Government policy has been to increase the average farm size.
Like Spain, when agricultural land is sold, there are pre-emptive rights that govern who can buy it. In Italy, the priority goes to:
The co-owner.The tenant (where a rental contract has been in place for at least two years).The neighbouring farmers, as long as they are ‘family-based farmers’ or ‘professional farmers’ under Italian law.‘Family-based farmers’ are defined in law as farmers who, along with their family, spend at least one-third of their working hours on the farm, and a minimum of 104 days per year. Farming must be their main working activity and source of income.
‘Professional farmers’ must spend at least 50% of their working hours on the farm and rely on farming for at least 50% of their income.
They must also hold agricultural education qualifications or have spent at least three years working as an entrepreneur in the farming sector.
Lithuania: rules to land ownership – but also exceptions to the rules
The number of small farms, particularly those under 10ha, has been falling in Lithuania, while the number of large farms over 100ha has been rising.
In 2020, the average farm size was around 19ha. Buyers from outside Lithuania cannot buy more than 10ha of agricultural land.
Individuals and companies that want to buy farmland in Lithuania must get permission from its National Land Service.
Pre-emptive rights are given to co-owners, tenants, neighbouring landowners, farmers (natural or legal persons) who farm land in the municipality or neighbouring municipality, and the state.
Existing landowners and ‘related persons’ can increase their land holdings in Lithuania, as long as the total amount of land acquired from the state doesn’t exceed 300ha and their total land ownership does not exceed 500ha.
Related persons include the spouse, parents, children and others legally connected. However, despite these rules, there are high-profile examples of people and companies owning significantly more land than these rules should allow.
Lithuanian politician, agronomist, and, ironically, former chair of the Lithuanian Peasants Party, Ramunas Karbauskis, is said to own up to 24,000ha of land through his Agrokoncernas company, which is a seed, fertiliser and plant protection business. Other large landowners include agricultural companies, business people and investment funds with reported land holdings of over 5,000ha each.
In July 2020, government legislators in the Lithuanian Seimas pledged to strengthen the control of the transfer of agricultural land and prevent the acquisition of more agricultural land than is permitted by law.
Netherlands: buy and sell at will, but strict protection for tenants
The Netherlands has no restrictions on the buying or selling of agricultural land and there are no pre-emptive rights for anyone to buy land like those that apply in some other European countries.
There are no residency requirements, no need to be established in the country and no requirement to hold any professional qualifications to buy land. Neither are there any maximum or minimum limits on the sales price of land or the maximum size of a farm.
However, there have been traditionally strong protections in place for tenants on land. Regulated tenancy contracts for farms set out a maximum rental payment and a minimum duration (12 to 26 years). Tenancies were automatically renewed and could be inherited. Breaking a tenancy could only occur under strict conditions, such as if the owner wants to cultivate the land themselves.
Since 2007, deregulated or liberalised tenancy agreements have become more popular, with a much shorter maximum contract length of six years and significantly fewer rights for the lease.
More recently, environmental targets have been to the fore of heated land use debates in the country.
Last year, the Netherlands secured the backing of the European Commission to spend €1.5bn buying out livestock farms in Natura 2000 areas. Two schemes were approved to entice dairy, pig, veal and poultry farms to close, in an effort to reduce nitrogen emissions in certain parts of the country.
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