17:56 20.07.2021

MPs propose to limit purchase of land by legal entities to 500 ha

2 min read
MPs propose to limit purchase of land by legal entities to 500 ha

The Verkhovna Rada is proposed to reduce the largest possible area of land plots allowed for purchase by citizens of Ukraine and legal entities from January 1, 2024 from 10,000 hectares to 500 hectares, to oblige the buyer to cultivate at least 80% of the acquired land for at least five years, and also introduce a number of restrictions to prevent the concentration of land in one hand.

Bill No. 5771-1 with amendments to the Land Code of Ukraine regarding clarification of the criteria for acquiring ownership of farmland plots was registered on July 19 in the Verkhovna Rada by MPs Oleksiy Ustenko and Oleksandr Kachura (both are from the Servant of the People parliamentary faction).

The bill proposes to allow the purchase of up to 500 hectares of farmland only to citizens of Ukraine and legal entities created in Ukraine, while the buyer, after the completion of the transaction, is planned to be obliged to cultivate at least 80% of the purchased land for a period of at least five years. In addition, the bill proposes a ban on any changes in the composition of participants (shareholders, members) of a legal entity that has bought the land for a period of at least three years. According to the authors of the bill, these measures will neutralize the scheme of buying up land by large holdings through dummies.

In an explanatory note to the bill, the MPs refer to the experience of Poland, where there are restrictions on the land market, similar to those proposed in bill No. 5771.

In addition, the authors of the bill propose to temporarily set the size of the regulatory evaluation of land, below which the value of agricultural land cannot be estimated when concluding transactions with it, at a level not lower than $1,200 per ha. It is proposed to introduce an interim measure for a period of six months from the date of entry into force of the new methodology for regulatory evaluation of agricultural land, which the Cabinet of Ministers will have to develop and approve if the Rada adopts this bill.

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