The Land Law
On June 21, 2013, Fidesz–Christian Democratic People’s Party (KDNP) National Assembly representatives adopted a new Land Law (source in Hungarian). The primary purpose of the law was to prevent companies and citizens from European Union member states other than Hungary from purchasing agricultural or forested land in the country following the expiration of the ten-year moratorium on such purchases that went into effect after Hungary joined the EU in 2004.
Hungary’s previous Land Law (text in Hungarian) passed in 1994 specifically prohibited foreigners from purchasing such land in Hungary, though would have openly violated European Union regulations regarding the free movement of capital within the EU following the expiration of the ten-year moratorium on May 1, 2014.
In 2014, the year the Land Law came into force, agricultural land constituted 57 percent of all land in Hungary, while forested land constituted 20 percent of all land in the country (source in Hungarian).
The new Land Law (text in Hungarian) imposed the following requirements on purchases of agricultural or forested land of more than one hectare in area: the purchaser must be a natural person who is a citizen of a European Union member state; the purchaser may not therefore be a juridical person such as a company; and the purchaser must live near the purchased land and personally work the land as a qualified farmer or forester subject to approval from a designated professional committee (source in Hungarian).
The law furthermore stipulated that a single individual could purchase no more than 1,200 hectares of agricultural or forested land under regular conditions and 1,800 hectares of such land under certain “preferential” conditions.
The law also annulled most usufruct contracts in which foreigners had acquired land via Hungarian citizens who served as its formal owner.
In May 2014, Rural Development Minister Sándor Fazekas said “We will not give an inch on the rigor of the Hungarian Land Law. We will defend Hungarian land, we will defend the black locust and pálinka [traditional Hungarian fruit brandy]” (source in Hungarian).
In October 2015, Agricultural Ministry State Secretary Márton Bitay stated “I can hardly wait for there to be a dispute about this [the Land Law]. For me, nothing better could happen to me politically than if they were again to say in Brussels: doggone, again you are refusing to let the foreigners in. If this happens, I will stand up in parliament and say: that is true, we are really not letting foreigners in” (source in Hungarian).
Land Law Protest in National Assembly
During voting in the National Assembly on the new Fidesz-KDNP-supported Land Law on June 21, 2013, nearly all representatives from the radical-nationalist Jobbik party occupied the speaker’s platform and displayed a sign reading “Treason!” (Hazaárulás!) while chanting “traitors!” (hazaárulók!). Meanwhile, those from the liberal-green Politics Can Be Different (LMP) party displayed a sign reading “Land Distribution Instead of Land Robbery!” (Földrablást helyett földosztást!) while shouting criticism of the law through a megaphone (source in Hungarian).
Jobbik opposed the law because it did not specifically ban foreigners, including those from European Union members states other than Hungary, from purchasing agricultural or forested land. Parties from the democratic opposition opposed the law because it permitted purchases of up to 1,800 hectares of agricultural or forested land and did not prohibit multiple members of a single household from purchasing such land, thus establishing the possibility of creating family-owned large estates (source in Hungarian).
Fidesz National Assembly representative József Ángyán withdrew from the party’s parliamentary caucus to sit with legislative independents following the adoption of the Land Law, which he charged would preserve the hold of major capital interests and party-affiliated “maffias” over agricultural property in Hungary to the exclusion of local farmers (see Cracks in the Monolith)
The National Assembly subsequently fined 40 Jobbik representatives and three Politics Can Be Different representatives for their participation in the protest against the new Land Law.
The European Union Objections to the Land Law
On October 16, 2015, the European Commission launched an infringement procedure against Hungary on the grounds that the unilateral annulment of usufruct contracts “seems to deprive the affected parties of their acquired rights and of the value of their investments” (source in Hungarian).
On May 26, 2016, the European Commission requested that Hungary, Slovakia, Bulgaria, Latvia and Lithuania amend their land laws because they represented restrictions on the free movement of capital within the European Union (source in English). The European Commission stated in the request that “Hungary has a very restrictive system which imposes a complete ban on the acquisition of land by legal entities and an obligation on the buyer to farm the land himself.”
In response to the European Commission’s request, Minister in charge of the Prime Ministry János Lázár said “This is a big dispute, one might say that there will be a war” (source in Hungarian).
On March 6, 2018, the European Union Court of Justice determined that “Depriving persons of their right of usufruct if they do not have a close family tie with the owner of agricultural land in Hungary is contrary to EU law” and that “[This] measure constitutes an unjustified indirectly discriminatory restriction on the principle of free movement of capital” (source in English).
Last updated May 18, 2018.