Foreigners will be entitled again to some highly beneficial rights in Hungary as the European Court has ruled against the country’s former legislation.
Some legislators in Hungary believed that foreigners circumvented those statutory provisions with the right of usufruct that was supposed to prevent them from purchasing agricultural land in Hungary. Basically, foreigners gained the right to use a land instead of buying it, with the intention to purchase it later.
In real life, this looked like the following example. A foreigner obtains the right to use the land, but the owner of the land has an agreement with the tenant that the land can be bought when Hungarian law allows it. A lawyer’s website defines the right of usufruct as the following:
“The beneficiary may own, use, exploit and take advantage of the thing (real estate) owned by another person. There is only one thing that distinguishes the right of usufruct from the right of ownership: the beneficiary does not have the right to dispose of it (e.g. he cannot sell or encumber the property).”
This definition explains why renting the land was seen as a solution. After 2002; however, Hungarian law made it forbidden to gain the right of usufruct for agricultural lands in the case of individuals who were not close relatives of the owner. The decision made this loophole in the legal system disappear. The decision; however, was met with fury, especially in Austria and Germany.
“The measure mostly affected Austrian and German citizens and their companies, who had registered the right of usufruct in Western Hungary, near the border, mainly in Vas, Győr-Moson-Sopron, Zala and Veszprém counties.” – writes novekedes.hu. The portal adds that they were granted no compensation. These individuals and companies eventually turned to the court of law, and the European Court.
The most important argument against the law was that it violated the rights of free establishment and free movement of capital, which are fundamental rights of the European Union. In 2018 and 2019, the European Court ruled in favour of the foreigners. Now, the law has been altered, and foreigners can resume their right of usufruct or receive financial compensation.
Individuals who want to regain their rights in Hungary have to submit their requests between 1 July 2022 and 31 December 2022. They will receive an official reply until 7 May 2023. If giving back the right of usufruct is impossible (for instance, the land was sold to someone else), monetary compensation will be given. Foreigners can also Individuals who want to regain their rights in Hungary have to submit their requests between 1 July 2022 and 31 December 2022. They will receive an official reply until 7 May 2023. If giving back the right of usufruct is impossible (for instance, the land was sold to someone else), monetary compensation will be given. Foreigners can also directly request financial compensation instead of reapplying for their rights.
Source: novekedes.hu, drmarkolevai.hu