It is not impossible to purchase agricultural property in Poland
The regulations limiting the trade in land are, in common opinion, very restrictive in Poland. The consent of the National Agricultural Support Center (KOWR) is required even for the purchase of 1 ha of an agricultural plot by a natural person, if he is not a farmer. “During the lockdowns, many of us were looking to move outside the city. The interest in purchasing agricultural real estate has increased. And although this market is still very heavily regulated, statistics show that the regulator does not interfere with this turnover as often as it might seem,” says Aleksandra Jach, Counsel at Wolf Theiss.
Pursuant to the provisions of Art. 2a of the Act on shaping the agricultural system, the purchase of agricultural real estate by entities other than an individual farmer requires a permit from the Director General of the KOWR, expressed in an administrative decision. The Act provides for a number of exceptions, which concern, among others: relatives of the seller, local government units and the State Treasury, as well as cases specified in the Act (e.g. purchase of agricultural property as a result of inheritance, acquisition of agricultural property with an area of less than 1 ha or as a result of abolition of joint ownership).
"Acquisition of agricultural real estate by individuals, as a rule, concerns plots of up to 1 ha - so the consent of the KOWR is not required. However, despite this fact, the purchase of agricultural land over 0.3 ha does not release the buyer from the obligation to run a farm for 5 years following its acquisition, nor does it exclude the statutory right of pre-emption. However, in order to buy an agricultural property over 1 ha, it is necessary to obtain the consent of the National Center for Agricultural Support, which is subject to many conditions," says Aleksandra Jach.
As reported by KOWR, in 2021 this institution received over 42,000 conditional sales contracts for agricultural real estate with a total area of 38,230 sqm, for which KOWR had the right of pre-emption. KOWR exercised its right in just 171 cases, ultimately buying agricultural properties with a total area of 2,390 sqm.
"KOWR exercised its pre-emptive right in 2021 in relation to only 0.5% of conditional contracts (which corresponded to 6.2% of the land area covered by these contracts). KOWR also spent over PLN 80 million on these purchases. According to the guidelines provided to the directors of local units, the use of pre-emption must be particularly justified for such purchases to be possible," adds Aleksandra Jach.
The act on shaping the agricultural system also provides that agricultural land may be purchased by a natural person, even in the case of an area of more than 1 ha, if it does not meet the statutory requirements. To carry out such a transaction, the seller should apply to KOWR with a request for consent in the form of an administrative decision.
"In fact, many buyers of agricultural real estate do not meet the criteria of "individual farmer" at all. The legislator has provided for several cases in which such consent may be granted. Among other things, it can be shown that there were no "individual farmers" willing to purchase, agricultural activities would be conducted on this land and there would be no excessive concentration of land, ie pursuant to Art. 2a paragraph 4 point 1 UKUR, inter alia it should be shown that an attempt was made to find a buyer of the land meeting the statutory criteria (by posting an advertisement about the sale on a special website of KOWR), but there were no willing buyers at the specified time," explains Alek-sandra Jach.
In 2021, over 12,000 applications for consent to the acquisition of agricultural real estate with a total area of 58,640 sqm, and administrative decisions were issued in total over 10.5 thousand, concerning agricultural real estate with an area of 52,890, of which 93.4 percent. positive. In the case of transactions where the buyer was a natural person (Article 2a (4) (1) UKUR), there were as many as 6,000 applications.
"If we compare the common belief about the restrictive right to acquire agricultural land in Poland, with the statistics published by the KOWR itself, it turns out that a natural person, provided that he declares to conduct agricultural activity on the purchased land, has no major problems with the purchase of agricultural land. It is also worth pointing out that the purchase of real estate against the provisions of the act is invalid, but it must be confirmed by a judgment of a common court. According to my information, in the whole of 2021, the KOWR brought only 4 actions under Art. 9 (2) UKUR," emphasizes Aleksandra Jach.
According to the KOWR, in 2021 a total of 15 appeals were filed with a higher-level authority than decisions concerning agricultural real estate with a total area of 297 ha. The Minister of Agriculture and Rural Development, as the second instance authority, upheld 7 decisions of the Director General of KOWR, and in relation to one decision of the Director General of KOWR - discontinued the administrative proceedings. A person is not any of the decisions of the KOWR appeals in the above scope shall have the right to lodge a complaint with the administrative court. No administrative decision issued in 2021 regarding the consent to acquire agricultural real estate was appealed to the voivodeship administrative court in 2021.