The new regulation may have significant practical implications for agricultural enterprises, investors, landowners, and land-using companies.
1. Key Change in Brief
Following the amendment, it is no longer considered an impermissible transfer of land use if the owner of agricultural land allows another agricultural producer to use the land under a lease agreement, regardless of whether the lessee is:
- a natural person, or
- a domestically or foreign-controlled legal entity.
This effectively removes the previously strictly interpreted obligation for self-cultivation and significantly expands the lawful possibilities for land use.
2. Practical Implications
🔹 For Agricultural Enterprises
- Expanding cultivated areas through leasing is significantly easier.
- It is no longer required that the landowner personally cultivates the land.
- Land owned by investors can now be managed by professional agricultural companies.
🔹 For Landowners and Investors
- Agricultural land becomes a classic investment object without the obligation to cultivate it personally.
- The amendment strengthens the landowner’s position, as they retain significant influence over to whom the land is leased.
🔹 For Lessees
- The new regulation increases the availability of leasable land.
- However, it may create uncertainty in renewing existing lease agreements, as the landowner’s veto right has been strengthened.
3. Further Relevant Change: Landowner’s Veto Right
The amendment modifies the previously mandatory application of the ranking of pre-emptive lease rights so that the landowner can now:
- reject a preferentially entitled party, and
- select a contractual partner more freely.
This:
- increases contractual freedom,
- but reduces legal certainty for lessees.
4. Risks and Open Questions
- Accelerated land concentration through indirect ownership and use structures,
- possible increase in speculative land purchases, particularly for investment purposes,
- impacts of future EU agricultural subsidy rules from 2028, as well as potential caps on area-based direct payments,
- formal continuation of local land commissions and pre-emption rights, despite decreasing practical relevance.
5. Recommendations for Action
✔ Review and redesign of purchase and lease agreements
✔ Legal and tax review of existing investment structures
✔ Risk analysis of ongoing lease agreements
✔ For agricultural enterprises: optimization of business structure and land use
If the amendment raises concrete investment, contractual, or structuring questions for you, we are happy to provide individual legal analysis and tailored solution proposals.
Contact:
Dr. Géza Katona, LL.M., Attorney at Law
Katona és Társai Ügyvédi Társulás
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-106 Budapest, Tündérfürt utca 4
Tel.: +36 1 225 25 30
Mobile: +36 70 344 0388
Fax: +36 1 700 27 57
g.katona@katonalaw.com
www.katonalaw.com