Buying arable land to build on: what has to happen before it becomes a building plot

The offer sounds tempting: land on the edge of the village, next to the road, at the price of arable land, with the seller adding that “the land-use plan already shows it as building land”. Whether it will be possible to build there, however, is decided neither by the price nor by the seller’s word. If the land is recorded in the cadastre as agricultural land, it must first go through the procedure under Act No. 220/2004 Coll. on the protection and use of agricultural land. That procedure cannot be circumvented by contract and its outcome is not certain in advance.

When land counts as agricultural land

Agricultural land means land recorded in the cadastre as arable land, a hop garden, a vineyard, an orchard, a garden or permanent grassland (Section 2(b)). It does not matter whether it lies inside the village or beyond it, nor how it looks on the ground. A garden behind a house in the centre of the village is, from the statute’s point of view, just as much agricultural land as a field out in the countryside. The first step is therefore the title sheet: what type of land is recorded, whether the parcel lies within the built-up area of the municipality, and whether it is subject to encumbrances or a lease.

Without a withdrawal decision there can be no building

The basic rule reads:

Agricultural land may be used for non-agricultural purposes only on the basis of a decision on its withdrawal.

— Section 17(1) of Act No. 220/2004 Coll. (unofficial English translation)

The statute also provides that agricultural land may be used for building purposes only in necessary cases and to a justified extent, and that the land protection authority must protect in particular land classified in quality groups one to four according to the code of the soil-ecological valuation unit, and vineyards (Section 12(1)). High-quality land is therefore protected more strictly when withdrawal is sought.

The application for withdrawal must be accompanied, among other things, by the design documentation, a geometric plan of the areas to be withdrawn, a certificate of the soil-ecological valuation unit and a binding opinion of the land-use planning authority (Section 17(5)). Future use of the land for building purposes must be approved by the land protection authority as early as the approval of the land-use plan (Section 13(2)); that consent is not required where the total area withdrawn does not exceed 1 000 m² (Section 16(2)). A withdrawal decision alone is therefore not enough for building; what the municipal land-use plan says about the land, if the municipality has one, and the binding opinion of the land-use planning authority are decisive too.

A final decision on permanent withdrawal is the basis for issuing a decision on the building project (Section 17(14)) and, on its basis, the cadastre changes the type of land to other area (Section 17(7)). It applies only to the approved project and ceases to be valid if the land is not used for that project within three years of the decision becoming final (Section 17(10)); any levy already paid is not refunded in such a case.

An exception applies to a change in the agricultural type of land with an area of up to 1 000 m² within the built-up area of the municipality, for which no withdrawal decision is issued and the land protection authority issues only an opinion (Section 17(2)(b) and (3)). Even then, however, the land-use plan and the other conditions for building are decisive.

The levy and other obligations

Whoever proposes the non-agricultural use of land pays a levy for its permanent or temporary withdrawal according to the code of the soil-ecological valuation unit (Section 12(2)(l)). It must also strip the humus horizon in accordance with the approved balance sheet, care for the withdrawn land until the building is completed and, when dividing land, must not disrupt the integrity of the fields or create parts unsuitable for farming. The amount of the levy depends on the quality of the soil and may be reflected significantly in the overall price of the land, which is why it should be known before signing.

How to structure the purchase

Until the buyer has verified that the land-use plan permits building and that the land protection authority envisages withdrawal, the buyer is buying agricultural land, not a building plot. Before signing we recommend obtaining information from the municipality about the land-use plan, establishing the quality of the soil, checking access from a public road (see the article on the right of way across another person’s land) and any existing lease (see the article on selling land with a tenant in place), and, where land outside the built-up area is to be divided, the ban on fragmentation described in the question on the ban on fragmenting land. If you are buying before everything has been arranged, the purchase price and its due date should reflect the risk that building will not be possible, for instance through a reservation agreement, a future contract or conditions in the purchase agreement.

We carry out due diligence on the land and prepare a tailored contract as part of our transfers of agricultural land service. Where the land is already a building plot within a municipality, we continue as part of our purchase and sale of land service.