Research on interventions to manage land markets and limit the concentration of land ownership elsewhere in the world (2017-2018)
This research was carried out by staff at the Centre for Mountain Studies for the Scottish Land Commission, in collaboration with Malcolm Combe at the University of Aberdeen Law School and Prof Norman Hutchison at the University of Aberdeen Business School. The project was commissioned by the Scottish Land Commission to inform their work on concentrated land ownership in Scotland.
In Scotland, there are no restrictions on how much land a single individual can own, and a concentrated pattern of large-scale private land ownership exists, particularly in rural areas. This study was commissioned to enable the Scottish Land Commission to learn from international experience of imposing limits on who can own land and/or how much land any single individual or entity can own.
The research identified and described restrictions on land ownership in 22 countries (18 in the EU/EEA). The countries were selected using a set of criteria to ensure lessons were learned from countries with a similar legislative context and characterised by strong regulation, governance and transaction processes, low levels of perceived corruption, and a strong property rights regime. Desk-based research identified the range of interventions in the countries, and findings were cross-checked with country experts to ensure accuracy.
Interventions in the countries include restrictions that relate to: foreign ownership of land; ownership approval processes; upper and lower area limits; owner characteristics and land use requirements; pre-emptive rights to buy land; and measures to reduce land fragmentation. A range of motivations underpin the implementation of interventions to achieve policy objectives related to land ownership in the various countries. Analysis of the motivations and the interventions allowed countries to be grouped according to a typology, which identifies ‘foreign interest limiters’, ‘land use stipulators’ and ‘land consolidators’.
In 18 of the countries considered in the study, some form of approval exists in relation to who can own land. Twelve countries require foreign land acquisitions to be approved prior to completion; processes of this nature exist to check the public interest impacts related to land purchase by a non-citizen. Approval processes are not limited to land acquisitions by foreigners: six countries require the relevant authority to approve all purchases of agricultural land. Underlying concerns tend to include: the local residence of the land owner; protection of agriculture; and the avoidance of land fragmentation. A formal approval process related to the purchase of land or property does not exist in Scotland. Based on the experience in other countries, developing such a framework would not be unusual and may present an opportunity to consolidate what is in the public interest, in terms of who can own land.
While the ownership of land by foreign interests is subject to regulatory restrictions in nine of the countries, outright bans on foreign ownership are not common (and EU law prevents EU Member States from restricting land purchases by EU citizens). Policy objectives associated with such restrictions generally include: preventing foreign-based speculation in land; controlling the amount and direction of direct foreign investment; ensuring local control over food production; and indirectly controlling immigration. In Scotland, motivations to restrict foreign ownership of large land parcels may be linked to the negative implications of a foreign land owner not being resident on the land, with purchases predominantly for recreational and/or speculative purposes. Where similar concerns have been raised in other countries, approval processes exist to restrict land purchases (regardless of the origin of the purchaser) that may lead to these concerns becoming a reality.
In the countries studied, the implementation of restrictions on land ownership was more commonly driven by land speculation than by the intention to limit concentration of ownership. Only a few examples were identified of upper limits to the amount of land that any one individual or entity can own. Where such limits exist, they tend to be targeted at foreign land acquisitions and/or used as planning control mechanisms, rather than being used to restrict ownership rights or as mechanisms for redistribution.