How EU countries sell their land and what Ukraine should pay attention to
Ukraine is one step closer to starting EU accession negotiations.
Land reform and land markets will have to be aligned with generally accepted European norms.
Despite some unprofessional speculation, this does not mean uncontrolled and total land sales. Each EU member state sets its own filters, rules and restrictions for individual land relations.
Read more about what land market models exist in different EU countries, the current state of the land market in Ukraine and the opportunities the land reform will open in the article by Yurii Horda, Aequo advisor, and Yevheniia Chernetsova, Aequo lawyer – EU land market: How it works and what Ukraine should be ready for.
As part of the project the Agriculture Resilience Initiative (AGRI) – Ukraine initiated by the USAID for the analytical support of aligning Ukrainian legislation in the agricultural sector to European law, we, together with colleagues from Civitta and EasyBusiness, have analysed the experience of 12 EU member countries in regulating land relations.
We have selected countries from Western (the Netherlands, Belgium, Ireland, Spain, France) and Central-Eastern Europe (Lithuania, Poland, Romania, Slovakia, Hungary, Croatia, Czechia) based on the relevance of their experience for Ukraine.
All these countries have an open market for agricultural land (there are no bans/moratoriums on the alienation of such land), but the degree of liberalisation of regulation varies significantly, especially when comparing Western and Eastern European countries.
The most liberal in regulating land relations are the Netherlands and Belgium.
Also, among the countries of Central-Eastern Europe, the land markets in Czechia and Slovakia are liberalised. In France, on the contrary, there is one of the most regulated land markets in the EU. However, the new EU members tend to have a tightly regulated land market.
Hungary has the most restrictions.
In most Western European countries, such as the Netherlands, Belgium, France, Spain, as well as in Slovakia, tenant rights are maximally protected. Mechanisms for protecting tenants include setting minimum lease terms for agricultural land (varying from 5 to 27 years in different countries), but not only.
In EU countries, due to the principles of free movement of capital and non-discrimination, there are generally no restrictions on the ability of citizens or legal entities from other EU countries to acquire land.
At the same time, the situation is different for individuals – residents of countries outside the EU.
From 1 January 2024, as part of the so-called second stage of the land reform, legal entities established by citizens of Ukraine were given the right to purchase agricultural land. The area that can be held in one hand (legal or natural person) has been increased from 100 to 10,000 hectares. For legal entities that want to receive passive income from renting, a market with income better than deposits is opening up.
The market is currently in its early stages, with only 1% of all agricultural land in Ukraine sold in three years.
Experts predict that the market will become more active over the year, and land prices will rise.
Already now it is necessary to do the "homework" and take into account EU norms, CJEU positions, so that Ukrainian business is competitive in the European market, Ukraine is attractive to investors and in the future, to avoid lawsuits against Ukraine in the EU Court.
Completion of the land reform is a legal procedure that automatically catalyses economic processes, new opportunities for the country, farmers, as well as a new level of protection of landowners' and land users' rights.