PHILIP

The revision of the Agricultural Act contains considerable amendments and perspectives, which are relevant not only to traditional farmers, but to a larger part of the population. One of the most interesting changes is that in future, nearly everybody will be allowed to buy a major Danish farm. This will root out an old principle within Danish agricultural legislation, according to which the ownership to Danish farmland to the largest extent possible should rest with Danish farmers.
 
The present rules state as the only requirement in connection with purchase of farmland resulting in a total ownership of less than 30 hectares that the purchaser, or in his place a tenant, must reside on the farm. This is called “impersonal residency requirement”. If the purchaser becomes the owner of more than a total of 30 hectares after purchasing new farmland, the existing rules dictate “personal residence”, and there are further requirements as to education and personal management.
 
There is a lot to indicate that the present restrictive rules on ownership will be changed from 1 April 2010 where the new Agricultural Act will likely be passed. According to the bill, an “impersonal” residency requirement will be implemented in connection with acquisition of farms both larger and smaller than 30 hectares. Furthermore, education requirements will be abolished as well as the buyer’s obligation to operate the farm himself. This means that anybody in principle may acquire large farms without having to meet requirements to residency and education. At the same time, the limitation of ownership to farmland will be removed. The present maximum limit is 400 hectares or 4 farms.
 
As stated above, the bill is intended to take effect on 1 April 2010. In connection with the question of whether one as a buyer would become subject to the existing or new requirements to residency, the critical point of time is the date of the purchase agreement. Therefore, if, as a buyer, you want to be covered by the new, easier requirements on residency, the purchase agreement must state a date later than the date of the new act’s effective date.

Seen as a whole, the new rules will move the boundaries for ownership to Danish farmland dramatically, which may be of relevance to persons of independent means who might wish to possess major Danish farm(s)/farmland as part of wealth distribution.