Czech Republic: Charges to be paid for the reclassification of farmland may exceed the price for the land itself
On 1 April 2015, Act No. 41/2015 Coll. came into force, amending Act No. 334/1992 Coll., on the protection of the agricultural land reserve. As a consequence, the procedure for removing farmland from the agricultural land reserve (ALR) has changed.
Agricultural land may only be used for non-agricultural purposes if the government authority in charge of protection of the ALR issues a certificate of approval. This certificate is indispensable e.g. for zoning proceedings or building permission proceedings concerning a building project which anticipates the removal of farmland from the ALR. Certain charges are levied on the reclassification of farmland, the amount of which is being determined in accordance with the annex to the Act on the protection of the ALR and is primarily based on the soil quality rating of the to-be-removed land.
The Act on the protection of the ALR also stipulates exemptions: in some cases, the removal of land from the agricultural land reserve does not require the approval of the government authority in charge of protection of the ALR; in other cases, no charges will be levied for such removal. Until 31 March 2015, no such charges applied in cases in which farmland was recategorized for residential purposes within development areas (as per the relevant zoning plan). However, since the amendment to the Act on the protection of the ALR has come into force on 1 April 2015, this exemption no longer exists, and as a consequence, building a family home may become more expensive by tens of thousands of crowns (and the charges for removing the land from the ALR may in fact exceed the purchase price for the land plot). For this reason, prospective buyers should beware whether „their” land plot belongs to the agricultural farmland reserve or not.
Yet another amendment to the Act on the protection of the ALR is currently before the chamber of deputies of Czech Parliament. The draft bill anticipates that no official approval will have to be obtained for removing land plots which are accounted for in the zoning plan as development land for residential purposes; however, it is not quite clear whether such land plots will still be subject to the said levies.
Source: Act No. 334/1992 Coll., on the protection of the agricultural land reserve