Land acquisition powers and land ownership restrictions in European countries: evidence review

Executive Summary

As examined in a report by the Scottish Land Commission in 2019,^[1] Scotland has a highly concentrated pattern of land ownership. This means that a small number of people, companies, or organisations own a high percentage of the land. According to Wightman (2013), 1,252 owners hold 67% of privately owned rural^[2] land. Hindle et al. (2014) reached a similar conclusion that 1,125 owners hold 4.1 million hectares (amounting to 70% of Scotland’s rural land).^[3]

The Scottish Government is planning further land reform legislation this Parliamentary session (2021-26). This report was commissioned to support the policy development for new land reform proposals.

The review identifies regulations around land transactions, focusing on (i) land ownership restrictions and (ii) land acquisition powers, and examines the public interest processes attached to those transactions. The geographical focus is primarily on European countries, but also includes a recently introduced model in New Zealand and mentions South Africa. The focus on European countries enables a secondary analysis on the compatibility of the land transaction processes with European Convention on Human Rights law.

Most countries place some limitations on certain types of land transactions, but most have not established a specific ‘public interest test’ mechanism attached to those limitations.

Land ownership restrictions fall into several categories including: agricultural land, land of special interest, land surface area restrictions, type of owner, and nationality of owner.

‘Public interest’ is a key justification for interventions in land transactions (e.g. land ownership restrictions or land acquisitions). Determining whether there is a need for an intervention is generally considered to be within the discretion of the government. If the public interest test is not met then there is no justification for the intervention and it will fail to comply.

The European Court of Human Rights has reiterated that the definition of ‘public interest’ is necessarily extensive and that the Court will respect the legislature’s judgment as to what is ‘in the public interest’ unless that judgment is manifestly without reasonable foundation (James and Others v UK 1986). Beyond a wide definition of public interest, the Court is interested in whether the proposed intervention is necessary for that public interest to be achieved. The Court undertakes greater scrutiny of whether the measures are proportionate to the intended aims.

The research presents case studies on (i) land ownership restrictions and (ii) land acquisition powers. In relation to (i) land ownership restrictions, public interest tests feature to varying degrees:

The French Government introduced a new system of agricultural land administration (Le Société d’Aménagement Foncier et d’Etablissement Rural (SAFER)) under the Agricultural Orientation Law 1960. SAFER bodies operate an external assessment of public interest by reviewing agricultural land sales and intervening to ensure the sale meets the objectives of French agricultural land law. These processes were introduced and completed before ratification of European Convention on Human Rights.

In Switzerland, cantons (local administrative councils) have power to introduce land ownership restrictions on a ongoing basis in pursuit of the public interest.

In Finland, protection given to the communities of the Åland Islands were introduced prior to ratification of the ECHR and subsequently further developed. The restrictions apply to all transfers of land and do not require an administrative decision to be made in respect of each transfer. While land transfers are limited, there is no ‘public interest test’.

New Zealand stands out internationally as it has developed restrictions on foreign ownership of land through three ‘tests’: investor test; national benefit test; and national interest assessment. As New Zealand is not (and could not be) a signatory to the European Convention on Human Rights there is no possibility of review by the European Court of Human Rights.

Several other countries, including South Africa, have proposed stronger restrictions on land ownership but not all proposals have been passed into law. It may not say so in terms and there may be no formal requirement to consider this public interest test aspect but no legislature will pass laws without considering whether they are of public benefit.

In relation to (ii) land acquisition powers, case studies from Belgium, Bulgaria, the Czech Republic, Germany, and the Netherlands demonstrate that development, infrastructure, social justice and climate change can be the public interest justification for acquisition of land by the state for public projects.There have been no examples of a country seeking to use social justice or climate change specifically as the justification for interference with private property transactions.