On 24 December 2025, a significant amendment to the Hungarian Act on the Transfer of Agricultural Land entered into force, fundamentally reshaping the legal framework governing farmland use and agricultural leasing.
While the ownership rules for agricultural land remain formally unchanged, the amendment introduces a paradigm shift in land use, with potentially far-reaching consequences for agricultural companies, investors, landowners and funders.
1. What has changed?
Under the new rules, it no longer constitutes an unlawful transfer of land use if the owner of agricultural land leases the land to another agricultural producer, even if:
- the owner does not cultivate the land personally, and
- the lessee is a corporate entity, including one owned or controlled by foreign investors.
This effectively relaxes the previously strictly interpreted obligation of owner cultivation, significantly expanding the range of lawful and market-based land-use structures.
2. Practical implications for market participants
🔹 Agricultural companies
The amendment facilitates the expansion of cultivated land through lease arrangements, enabling professional agricultural operators to farm land held by investors or private individuals. This provides greater operational flexibility and supports scale-based efficiency.
🔹 Landowners and investors
Farmland increasingly functions as a stand-alone investment asset, no longer tied to personal agricultural activity. Investors may retain ownership while outsourcing cultivation to experienced operators, aligning Hungarian farmland more closely with international investment models.
🔹 Lessees
While the supply of leasable land is likely to increase, lessees may face greater uncertainty regarding the renewal of existing lease agreements, as landowners’ contractual freedom has been strengthened.
3. Strengthened landowner rights in leasing decisions
A further key element of the amendment concerns pre-lease priority rules.
Landowners are no longer strictly bound by statutory ranking systems when selecting a lessee and may now exercise a veto right against higher-ranked candidates.
This development:
- enhances contractual autonomy,
- but may reduce long-term legal certainty for agricultural tenants.
4. Risks and open questions
Despite the continued existence of local land committees and statutory pre-emption rights, the amendment raises several strategic questions:
- Will land concentration accelerate through indirect ownership and leasing structures?
- Will the new flexibility attract speculative capital into the farmland market?
- How will upcoming EU agricultural subsidy reforms from 2028, including a possible cap on direct payments, affect land values and lease pricing?
These issues will likely shape the Hungarian agricultural land market over the coming years.
5. Key takeaways for decision-makers
✔ Leasing has become the central tool for farmland expansion
✔ Farmland investment structures require legal and tax reassessment
✔ Existing lease portfolios should be reviewed for risk exposure
✔ Agricultural operators should re-optimise land-use and operational models
Conclusion
The amendment marks a clear shift away from the traditionally idealised concept of owner-cultivated family farming toward a more market-oriented and investment-friendly land-use regime.
For those active in Hungarian agriculture or farmland investment, early legal and strategic adaptation will be critical.
If you would like to discuss the practical impact of these changes on your operations or investment structures, feel free to reach out.
Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)
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Katona és Társai Ügyvédi Társulás
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-106 Budapest, Tündérfürt utca 4.
Tel.: +36 1 225 25 30
Mobil: + 36 70 344 0388
Fax: +36 1 700 27 57