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Minor liberalization of regulations on trade in agricultural land

Minor liberalization of regulations on trade in agricultural land

On June 26, 2019, an amendment to the act on shaping the agricultural system envisaging some facilitation in trade in agricultural land came into force. According to the recently binding regulations, only an individual farmer can be the buyer of agricultural land. On the other hand, the purchase of agricultural real estate by other persons, in principle, requires the consent of the General Director of the National Center for Agricultural Support expressed in an administrative decision. At the same time, the existing regulations provided for exceptions to the above rules enabling free acquisition of agricultural land, inter alia, by close persons, the State Treasury, local government units, churches and religious associations, as well as by heirs and persons indicated in the specific bequest. In addition, the current regulations did not apply to agricultural real estate of less than 0.3 ha.

The amendment that is in force foresees further exclusions from the obligation to obtain the consent of the General Director of the National Center for Agricultural Support. They concern, inter alia, the acquisition of agricultural real estate:

  • with an area smaller than 1 ha,
  • in the course of enforcement and bankruptcy proceedings;
  • as a result of the abolition of joint ownership, division of joint property upon termination of the marriage and the division;
  • inheritance;
  • as a result of division, transformation or merger of commercial law companies.

The introduced changes allow, therefore, easier marketing of small agricultural land, which are often not used for agriculture, while providing attractive grounds for development investments. However, it should be borne in mind that while the purchase of agricultural plots below 1 ha within the administrative boundaries of the city is not generally associated with further restrictions for the buyer, the purchase of such a plot outside the city may prove to be a problem for the buyer in the long term. Namely, in accordance with the regulations in force, the buyer of agricultural real estate outside the city is obliged to run an agricultural farm, which included acquired agricultural real estate, for a period of at least 5 years from the date of purchase of this property, and in the case of a natural person run the farm in person. Moreover, in the indicated period of 5 years, the purchased real estate cannot be sold or given to other entities (e.g. in the form of a lease) without the consent of the General Director of the National Center for Agricultural Support. The obligation to agricultural use of acquired land and the prohibition of sale or lease, however, does not apply to real estate acquired as a result of inheritance and the division of inheritance or debt collection.



Marcin Kręglewski

Lawyer

Marcin Kręglewski

Barrister, Partner

Marcin Kręglewski

Contact:

Rondo ONZ 1
00-124 Warsaw