The change may have significant practical implications for agricultural businesses, investors, landowners, and companies using agricultural land.
1. The key change in brief
Under the amendment, it no longer qualifies as a transfer of land use if the owner of agricultural land
grants the right to use the land to another agricultural producer under an agricultural lease agreement,
regardless of whether the lessee is:
• a natural person, or
• a business entity owned by Hungarian or even foreign shareholders.
This effectively removes the previously strictly interpreted obligation of owner cultivation and significantly broadens the scope of lawful land-use arrangements.
2. What does this mean in practice?
🔹 For agricultural businesses
• Expansion of land use through leasing becomes easier.
• It is no longer necessary for the landowner to personally cultivate the land.
• Land may remain in investor ownership while cultivation is carried out by professional agricultural enterprises.
🔹 For landowners and investors
• Agricultural land becomes a traditional investment asset, without an obligation to cultivate it personally.
• The amendment strengthens the owner’s position:
the owner gains decisive influence over the choice of the lessee.
🔹 For lessees
• While the legislation increases the supply of available land,
• it may also create uncertainty regarding the extension of existing lease arrangements, as the owner’s veto rights have been strengthened.
3. Related amendment: the owner’s veto right
The amendment abolishes the mandatory application of the previous statutory priority ranking for pre-lease rights, in the sense that
the owner may veto a lessee with higher statutory priority and may select the contracting party more freely.
This:
• enhances contractual freedom,
• while reducing legal certainty for lessees.
4. Risks and open issues
• Accelerated land concentration through indirect structures.
• The emergence of speculative land acquisitions, particularly for investment purposes.
• Future EU agricultural subsidy rules (from 2028), including a potential cap on area-based subsidies,
may affect land values and lease fees.
• Local land committees and the system of statutory pre-emption rights formally remain in place, but their practical relevance may diminish.
5. Key points to consider now
✔ Reassessment of land acquisition and agricultural lease agreements
✔ Legal and tax review of investment structures
✔ Risk assessment of existing agricultural lease agreements
✔ For agricultural businesses: optimisation of operational structures and land use
Should the amendment raise specific investment, contractual or structuring questions for your organisation,
our firm is pleased to assist you with tailored legal analysis and practical solutions.
Contact:
Dr. Géza Katona, LL.M.
Attorney at law (Rechtsanwalt)
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