Amendment to the Hungarian Act on the Transfer of Agricultural Land, which entered into force on 24 December 2025 and materially reshapes the legal framework governing farmland use, in particular agricultural leases.

The amendment may have significant practical implications for agricultural businesses, investors, landowners and companies using agricultural land.

1. The key change in brief

Under the amended rules, it no longer qualifies as an unlawful transfer of land use if the owner of agricultural land
leases the land to another agricultural producer under a lease (usufructuary) agreement,
irrespective of whether the lessee is:

a natural person, or
a company owned or controlled by Hungarian or foreign shareholders.

This change effectively relaxes 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 cultivated land through leasing becomes significantly easier.
It is no longer required that the landowner personally cultivates the land.
Land may remain in investor ownership, while cultivation is carried out by professional agricultural enterprises.

🔹 For landowners and investors

Farmland becomes a traditional investment asset, without an obligation of personal cultivation.
The amendment strengthens the position of the landowner, granting decisive influence over the choice of the lessee.

🔹 For lessees

While the new rules increase the supply of leasable land,
they may also create uncertainty in relation to the extension of existing lease agreements, as the landowner’s veto rights have been strengthened.

3. Related amendment: strengthened landowner veto rights

The legislative amendment has modified the previously mandatory priority ranking system for pre-lease rights, allowing the landowner to:

reject a lessee with higher statutory priority, and
freely select the contracting party.

This development:

enhances contractual freedom,
while reducing legal certainty for lessees.

4. Risks and open issues

Accelerated land concentration through indirect ownership and leasing structures,
potential increase in speculative land acquisitions, particularly for investment purposes,
the impact of future EU agricultural subsidy rules from 2028, including a possible cap on area-based direct payments, on land values and lease fees,
the formal retention, but potentially diminishing practical relevance, of local land committees and statutory pre-emption rights.

5. Key points to consider going forward

✔ Review and restructuring of land acquisition and lease agreements
✔ Legal and tax review of existing investment structures
✔ Risk assessment of ongoing agricultural lease arrangements
✔ For agricultural businesses: optimisation of operational structures and land use

Should the amendment raise specific investment, contractual or structuring questions for your business,
our firm is pleased to assist you with tailored legal analysis and practical solutions.

Contact:

Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)

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