Table of Contents:
- What was the situation until October 5, 2023?
- What is the current situation?
- Do the restrictions apply only at the stage of establishing a Family Foundation or also later?
- What is meant by acquiring real estate?
- Do you need to have farmer status to acquire agricultural real estate from a Family Foundation?
- What is the penalty for acquiring real estate without KOWR’s consent?
How it was until October 5, 2023?
Until October 5, 2023, the acquisition of agricultural real estate by a family foundation from its founder did not require prior approval from the Director General of the National Support Center for Agriculture (KOWR). Similarly, approval was not required for the acquisition of such real estate by a beneficiary, who is a close person to the founder, from the family foundation.
What is the current situation?
The legislator has equated the situation of Family Foundations to that of companies. A family foundation, to acquire agricultural real estate exceeding 1 hectare, must obtain the consent of the Director General of KOWR, expressed in the form of an administrative decision, and only if certain conditions specified by law are met.
Do the restrictions apply only at the stage of establishing a Family Foundation or also later?
Restrictions apply both when contributing assets to cover the founder’s fund and at later stages of foundation operation. The National Center acting on behalf of the State Treasury may submit a statement of acquisition of such real estate within one month of notification. After the acquisition of such real estate (regardless of the method), the family foundation may not sell or transfer agricultural real estate to other entities for 5 years.
What is meant by acquiring real estate?
The term “acquisition of real estate” also includes any kind of reorganization, including, for example, contribution in kind to a company, even if the foundation owns 100% of the company. Such transactions require approval from KOWR.
Do you need to have farmer status to acquire agricultural real estate from a Family Foundation?
The beneficiary, in order to acquire agricultural real estate from the family foundation (e.g., due to dissolution), must have the status of an individual farmer and obtain the necessary approvals if they do not meet the specified requirements.
What is the penalty for acquiring real estate without KOWR’s consent?
The acquisition of ownership of agricultural real estate, joint ownership, perpetual usufruct, joint perpetual usufruct of such real estate, as well as the acquisition of shares and stocks in a commercial company owning such real estate, made based on legal actions contrary to the described provisions, is void.
It is invalid to carry out legal actions without notifying the entitled party to the pre-emptive right or without notifying KOWR.
It is also invalid to sell or transfer ownership of real estate before the expiration of 5 years from the date of acquisition without the consent of the Director General of KOWR or to acquire agricultural real estate based on false statements or falsified or confirming false documents.