Stricter conditions for sale and purchase of agricultural land in Romania
Starting 13. October 2020, the conditions under which agricultural land can be purchased in Romania will change significantly.
The ranks of preemptors whose right must be respected before the sale of agricultural land have been reorganized. The following preemptors will have such a right starting 13th of October:
· 1st class: co-owners, first degree relatives, spouses and other relatives;
· 2nd class: owners of agricultural investments in tree crops, vines, hops, private irrigation and / or tenants;
· 3rd class: owners and / or tenants of neighbouring agricultural land;
· 4th class: young farmers;
· 5th class: “Gheorghe Ionescu-Șișești” Academy of Agricultural and Forestry Sciences and other research & development units in the field of agriculture;
· 6th class: natural persons with domicile / residence in the administrative-territorial units where the land is located or in neighbouring administrative-territorial units;
· 7th class: the Romanian state.
If none of the preemptors exercises their right within 45 days from registration of offer for sale, the owner of the land will be able to sell to natural or legal persons who meet certain conditions: (i) domicile or headquarters registered in Romania for at least 5 years prior to acquisition, (ii) previous experience of at least 5 years in carrying out agricultural activities in Romania, (iii) registration with the Romanian tax authorities. In addition, purchasing companies must prove that of the total income of the last 5 fiscal years, at least 75% represents income from agricultural activities and that the person in control has been domiciled in Romania for at least 5 years.
If no preemptor exercises its right or if none of the specialized buyers wants or meets the conditions to be able to buy agricultural land, the sale can be made to any natural or legal person, in accordance with the law.
The resale of agricultural land located outside a built-up area before 8 years from the purchase will be taxed additionally, by applying an 80% tax calculated on the difference between the sale price and the purchase price of the land.
The same tax will apply in the case of disposal of the control package of companies that own agricultural land located outside a built-up area, which represents more than 25% of the assets of the company, if disposal took place before the completion of 8 years after the purchase.
Law no. 175/2020 amending Law no. 17/2014 on measures to regulate the sale of agricultural land located outside built-up areas.