Land acquisition powers and land ownership restrictions in European countries: evidence review
The research looks at how countries have changed their land ownership laws and the extent to which that complies with the right to property included in the European Convention on Human Rights.
3. Land ownership restrictions – Case studies
This chapter sets out examples of land ownership restrictions in France, Finland, Switzerland, and New Zealand.
Land ownership restrictions differ from land acquisition powers, in that the state has the ability to limit the rights to own land under certain conditions, whereas through acquisition powers, the state can take back land from owners.
The European examples highlighted have not been challenged by claimants before the European Court of Human Rights. Therefore, we do not have direct insights on how the Court would interpret such legislation should similar restriction be introduced in Scotland.
Through land ownership restrictions the state has the ability to limit the rights to own land under certain conditions. The following case studies demonstrate different types of ownership restrictions, affecting agricultural land; protections of minorities; and regions of special interest.
Each case study sets out:
- the general context of the restrictions;
- the legal basis (legislation) that permits the restrictions;
- the aim/s* of the restrictions;
- the compensation arrangements where relevant (only in the French case-study as the other case-studies do not involve sale of property);
- any jurisprudence from the ECHR that exists relating to the restrictions and;
- the impact/s of the restrictions.
*A note on ‘aims’ or ‘objectives’ of legislation
According to the ECHR interventions with the right to property (A1P1) must be in accordance with the law.
For the purposes of the ECtHR, a legitimate aim is one that serves the public interest or the interests of others and, as the public interest is very broadly defined, the aims of legislation once established by parties are rarely challenged by the Court.
The onus is on the state parties to establish the aim/s of measures before the ECtHR and they may do so for the first time during the hearing at the ECtHR. It is not necessary for the aim/s of legislation to be embedded in the relevant domestic legislation, indeed in the majority of cases, the aims are not found in the foundational legislation. There is no obligation to explicitly state the aims of measures in advance.
For the case studies below, in order to try to identify the aims of land interventions, the relevant foundational legislation was identified, translated into English, and then reviewed for reference to the aim/s of the legislation. Where this did not substantiate the aim/s, a deeper dive into relevant academic and grey literature (e.g. government reports, working papers, white papers and external organisation publications) was undertaken to identify indications of the aim/s of measures.
It is a prerequisite that domestic avenues are exhausted before a case reaches ECtHR. If successfully challenged in domestic courts it will not continue in existing form and reach ECtHR so we can assume that what reaches ECtHR has not been subject to successful domestic challenge.
3.2 France’s SAFER: Agricultural land ownership restrictions
Restrictions on agricultural land are the most common kind of restrictions on land ownership globally. Through the Agricultural Orientation Law 1960, the French Government introduced a new system of agricultural land administration known as Société d’Aménagement Foncier et d’Etablissement Rural, or ‘SAFER’.
In the 1960 Act, the overall aims of the legislation are described as:
‘[T]o establish parity between agriculture and other economic activities;
(1.) By increasing the contribution of agriculture to the development of the French economy and national social life, by balancing the overall agricultural trade balance of the national territory, taking into account the evolution of the needs, the natural vocations of the country, its place in the Community and in the European Community and the aid to be given to underdeveloped countries;
(2.) By making agriculture participate equitably in the benefit of this expansion by eliminating the causes of disparity existing between the income of persons exercising their activity in agriculture and that of persons employed in other sectors, in order to bring in particular the social situation of farmers and agricultural employees at the same level as that of other professional categories;
(3.) By putting agriculture, and more especially family farming, in a position to compensate for the natural and economic disadvantages to which it remains subject compared to other sectors of the economy.’
These aims were considered to be partly in response to demands of young farmer movements who were struggling to access land, and partly in conjunction with France entering in the common market of the European Union.
There is a SAFER agency in each ‘département’ or state in France. SAFER is publicly chartered by Parliament and French law, and has a public interest function but is a private sector company. SAFER buys and sells land in rural and peri urban areas. Since c. 2000 SAFER has expanded its remit to conduct studies, create maps, and make recommendations relating to land use planning measures which protect agricultural and natural lands as well as environmentally sensitive areas.
To achieve its missions, each SAFER monitors farm land sales and intervenes when needed to make the sale best suit the objectives of the law. They take action by buying the land and selling it back to the person they choose. Unlike a private seller who will choose the highest bidder, the SAFER can choose to sell to the best bidder.
If a farmer wants to sell land, he can contact the regional SAFER which will pay a fair price for the land. Advertising is undertaken by SAFER through the town halls and on the Vigifoncier website. Candidates for the purchase must make a written submission. A regional Technical Committee (composed of members of the Agriculture Chamber, the majority farmers union, banks and insurance companies, regional authorities, and representatives of the State) examine all the projects based on multiple criteria. These can include:
- the local situation;
- SAFER’s missions;
- the skills of the candidate; and
- the viability of the project.
The Committee then make a recommendation to the Board of Directors which will make the final decision. The process is set out in more detail in the French example Appendix D.
The aim/s of the legislation
The regional SAFERs were created by the Agricultural Orientation Law of August 5, 1960. Their initial objectives were to reorganize farms (as explained above), in order to establish more productive agriculture, and to respond to demands of unionised young farmers. Since then, the SAFERs mandate has expanded to include protection of the environment, landscapes, natural resources such as water, and support of local authorities in their land projects.
When SAFER intervenes in the purchase of land compensation to the seller may be required. Compensation is given as “La compensation Agricole collective (CCA)”, which is defined as ‘the collective agricultural compensation intended to maintain or restore the agricultural economic potential lost due to development projects or works that permanently consume land in agricultural activity, whether they are of public utility or not.’
This review is focused on whether land ownership restrictions are deemed to fall within the public interest, a requisite for interference with Article 1 Protocol 1, ECHR.
France was one of the founding members of the Council of Europe in 1949, signed the European Convention of Human Rights in 1950, and ratified it in 1974, so the ECHR was not directly applicable in French law when the SAFER was established. There was overlap between membership of ECHR and the establishment of the SAFER administration therefore, however the French legislature did not have to comply with the ECHR at the point the measure was initially brought in. In any case the pre-existence of SAFER would not have prevented subsequent challenges before the ECtHR over SAFER on-going activity should they have been deemed admissible i.e. within the remit of the ECtHR.
A review of the HUDOC database found five hundred and seventy cases (after duplicates removed) concerning France and Article 1 Protocol 1. Of these cases five concerned the SAFER rules.
The following cases concern situations connected with SAFER farms but did not challenge the SAFER model, the public interest rationale, or the legitimacy of the state’s powers to place restrictions on land ownership.
- Affaire Hentrich v. France App 13616/88 1994: concerned just satisfaction for non-pecuniary damage caused by excessive length of civil proceedings.
- Fernandez et Autres v. France App 28440/05: Concerned the inaction of the Stat to end to an illegal occupation of the claimants’ agricultural estate.
- Affaire R.P. v. France App 10271/02 2010: Concerned the failure of the French authorities to end illegal occupation of the claimant’s properties.
- L.H. v. France App 13616/88. Concerned the seizing of property as a result of a tax discrepancy. The court found that the interference was in the public interest but not proportionate.
See the full list of cases reviewed in Annex B.
In terms of domestic jurisprudence, it should be noted that SAFER has faced criticism from the French Court of Auditors regarding, among others, lack of transparency and ethics in some deals and loss of its primary objectives.failure of proper notification to the buyers, 
The review found key studies on the impacts of SAFER. One suggests that the SAFERs have been successful in helping to limit the rise in land prices. Other reports show that the SAFER policies have succeeded in reducing the consolidation of agricultural land and maintaining relatively low land prices in comparison with other European countries.
3.3 Finland’s Åland Islands: Special region ownership restrictions
The Åland Islands consist of more than 6,700 islands off the southwest coast of Finland. The current population is estimated at 30,000 with over 40 per cent of the inhabitants living in the only town, Mariehamn, and the remainder of the population living on only 60 of the islands. 
The League of Nations granted the Åland Islands co-sovereign standing in 1921, pre ECHR, following a Finnish-Swedish dispute over ownership of the islands. 1921 established the special status of Åland, and did not include land restrictions. The ownership restrictions were legislated for in 1991. Consequently, Åland is a self-governing polity within Finland. The peace accord adopted by the League of Nations in 1921 contained guarantees for the protection of the Åland people as a minority and contained special, statutory protection for the Swedish language and culture on the islands.
The most recent version of the Act came into force in 1991, and sets out the autonomous rights of the region and its population. The restriction on land ownership is based within Chapter 2 of the Act on the Autonomy of Åland (1144/1991). The 1991 legislation restricts ownership of property to persons with the right of domicile and do not prevent people from settling in the Åland Islands provided they can acquire the right of domicile.
The right of domicile can be acquired in the following ways:
- At birth if it is possessed by either parent;
- Immigrants who have lived in Åland for five years and have an adequate knowledge of Swedish may apply for the status, provided they are Finnish citizens;
- The Åland Government can, occasionally, grant exemptions from the requirement of right of domicile for those wishing to acquire real property or conduct a business in Åland.
Those who have lived outside Åland for more than five years lose their right of domicile.
The aim/s of the legislation
The 1991 legislation concerning the right to own or be in possession of real property were introduced to ensure that the land would remain in the hands of the local population, the protected Swedish speaking community.
The Act on the Acquisition of Immovable Property in Åland (3/1975) was the previous basis for non-domiciles needing a permit to buy or rent property in the regions.
Finland signed the ECHR in 1989 and ratified in 1990. It was therefore subject to the jurisdiction of the ECtHR when the ownership restrictions were enacted. The current restrictions are based on 1991 legislation.
A review of the HUDOC database found one hundred and four cases (after duplicates removed) concerning Finland and Article 1 Protocol 1. Of these cases three concerned the Åland islands. A fourth case concerning Åland was found in relation to Sweden. None of these cases engaged the Åland land ownership restrictions. See list of cases reviewed in Annex B.
At the national level there has been debate in the Finnish Parliament in relation to the impact of the citizenship restrictions on the integration of immigrants.
The review did not find studies specifically documenting the impact of the land ownership restrictions on land ownership concentration or on wider social, economic or environmental outcomes in English language publications, although some may exist in Finnish. A 2007 report from Statistics Finland found that ‘summer cottage density’ in Åland grew by more than 2.5 summer cottages per each square kilometre of land between 1975 and 2006 (i.e. since the restrictions have been in place) suggesting the right to domicile restrictions have not restricted housing development but they may have impacted the demographics of owners i.e. increased second/multiple home owners.
3.4 Switzerland: Foreign ownership restrictions
Switzerland restricts home ownership to non-nationals through federal laws known as ‘Lex Koller’ which stems from legislation in 1961 and has been expanded since. (Switzerland ratified the ECHR in 1974 see below section on ECHR jurisprudence.) Local authorities (cantons) have established additional restrictions. The Federal Court has also issued decisions that have served to tighten the rules. There are additional rules (Lex Weber) in respect of second homes, intended to serve the policy objective of “rural sprawl containment”.
According to the Lex Koller, foreign persons are prohibited from buying real estate for investment purposes or land for development. Under certain conditions, non-resident citizens may acquire properties for vacation purposes only (provided such real estate is in an area designated by the cantonal authorities as a holiday resort, and subject to any further restrictions imposed by the municipalities). The plot must also be less than 1,000 square metres and the net living area less than 200 square metres in size. The acquisition of holiday apartments by non-Swiss nationals is subject to a quota which applies for the whole of Switzerland (only 1500 can be sold to non-nationals per year).
The legislation defines persons abroad as being either:
- Individuals resident or domiciled abroad
- Individuals living (as temporary residents) in Switzerland, but who are neither nationals of EU/EFTA member states nor holders of a valid permanent residence permit (the C permit).
Legal entities are considered persons abroad if they are either:
- Domiciled abroad (irrespective of whether they are controlled by persons abroad);
- Controlled by persons abroad (as in persons abroad hold (or control, whether directly or indirectly) more than one-third of the entity's equity capital or voting rights or provide significant amounts of debt capital to the entity.
The aim/s of the legislation
The policy objectives of the Lex Koller restrictions are recorded as protecting Swiss land from excessive foreign ownership. The 1961 legislation referred to the prevention of “foreign infiltration of native soil”, in German “Überfremdung des einheimischen Bodens”. 
Further objectives apply for the cantons restrictions such as promoting the construction of residential property, the promotion of tourism / mountain regions, and the containment of rural sprawl. Policy objectives for restrictions placed by local authorities (cantons) are noted as "business promotion, spatial planning and environmental protection”.
The initial Lex Koller restrictions were introduced in 1961, i.e. pre-ECHR commitments. Switzerland signed the ECHR in 1972 and ratified in 1974. It was therefore subject to the jurisdiction of the ECtHR. However, further Lex Koller legislation was passed through the Swiss Parliament later.
A review of the HUDOC database found eight cases (after duplicates removed) concerning Switzerland and Article 1 Protocol 1. Of these cases none engaged Switzerland’s land ownerships restrictions, and most were deemed inadmissible. See the list of cases reviewed in Annex B.
At the national level, there is continuous debate about whether the restrictions on foreigners should be abolished or tightened. Most recently, the Swiss National Council proposed a temporary ban on foreign acquisition, aimed to prevent Swiss businesses which have been financially affected by the COVID-19 crisis from being pressured to sell their business premises to foreign buyers at unfavourable terms and low land prices. The Swiss Council of States subsequently rejected the proposal unanimously, “mainly based on the arguments that, to date, the COVID-19 situation had not led to increased foreign demand for the acquisition of Swiss business premises and that the proposed temporary ban would have led to considerable legal uncertainty”.
The Lex Koller legislation seemingly has had a large effect on the housing market in Switzerland, as shown when the legislation was ‘relaxed’ in 2002 and 2005. According to one study, the relaxation of the law meant that foreigners were able to buy holiday homes in Switzerland, resulting in “substantial price inflation in this sub-market”. A 2022 study also found that “the second home restriction has helped fight excessive construction and building in extensively occupied touristic towns in the mountains, significantly reducing investments in new constructions without leading to greater negative impacts on tourism in the short-run period.”
3.5 New Zealand – An international example
Under the Overseas Investment Act 2005, and the Overseas Investment Amendment Act 2021, New Zealand operates three tests on overseas investors on land transactions. New Zealand is not a signatory to the ECHR but is party to the Universal Declaration of Human Rights and to seven of the nine UN human rights treaties.
The Investor Test is used to determine whether investors are suitable to own or control sensitive New Zealand assets. The investor test forms part of the assessment of most consent applications. It is beyond the scope of this current research to explore whether these types of restriction are compatible with the free movement of capital (one of the four core European Union freedoms).
The Benefit to New Zealand Test is applied to transactions involving “sensitive land” or fishing quota. It establishes a framework for determining whether the investment will be beneficial by assessing applications against 7 factors.
All land that has a property category on the District Valuation Roll as ‘residential’ or ‘lifestyle’ in New Zealand is ‘residential land’ and is therefore classed as sensitive.
Land may also be classed as sensitive depending on its size, type, and what it is next to. Land that is sensitive for any reason other than simply being residential land is known as ‘otherwise sensitive’ land, and different rules may apply to it. Land can have more than one sensitivity. For example, it can be both residential and otherwise sensitive land.
The National Interest Assessment is applied for some overseas investment consent applications. The Minister of Finance reviews these transactions to determine whether they are contrary to New Zealand’s national interest. While this assessment is only mandatory for transactions that meet certain criteria, Ministers may use their discretion to call in any transaction.
As New Zealand is outside of Europe, the country is not subject to the ECHR. Therefore, there are no examples of challenge against these tests under the ECHR.
‘Benefit to New Zealand’ Test
Of these tests the Benefit to New Zealand Test adds a new layer of considerations on top of national interest concerns. During the Benefit to New Zealand test, an investment will be assessed against seven factors, as outlined in Section 17 of the Overseas Investment Amendment Act 2021.
There are seven factors outlined in section 17 of the Overseas Investment Amendment Act 2021 that an investment will be assessed against, but these are non-exhaustive (see Box 1).
The Overseas Investment Office (OIO), part of Toitū Te Whenua (Land Information New Zealand), regulates overseas investment in New Zealand’s sensitive land, significant business assets, and fishing quota. The OIO assesses applications for consent under the Overseas Investment Act 2005. It also monitors and enforces compliance with the Act.
Details of the test are set out on the Toitū Te Whenua Land Information New Zealand website as follows:
The factors are broad and are intended to enable a holistic assessment of whether there is a net benefit to New Zealand.
The seven factors that applied in the test are found in Box 1.
Alongside these seven factors are additional tests that may apply:
If the sensitive land buyers intend to purchase is, or includes, farm land exceeding five hectares, the Farm land benefit test will usually apply.
The Farm land benefit test requires that the Economic benefits and Oversight or participation by New Zealanders factors be given high relative importance. The buyer must also establish a substantial benefit to New Zealand in relation to one or more of those factors.
If you are applying to acquire fishing quota the benefit to New Zealand test applies. All factors are applicable apart from: Public access and Protection of historic heritage. Section 57H of the Fisheries Act 1996 gives specific examples of benefits that may arise under each factor for fishing quota applications.
‘Disbenefit factors’ (water bottling or bulk water extraction)
If the investment involves water bottling or bulk water extraction for human consumption, an additional factor is whether the overseas investment will have, or is likely to have, a negative impact on water quality or sustainability.
This factor is relevant to all investments involving the extraction of water for bottling, or other extraction of water in bulk for human consumption.
Any negative impact on water quality or sustainability will be deducted from the overall benefit of the investment to New Zealand.”
This review found no evidence of an evaluation of the impacts of the three investment tests in New Zealand. This is likely because the new legislation only came into force in May 2021.
3.6 South Africa – anecdotal evidence
South Africa has not been included in the evidence review as the focus was primarily on Europe but it was deemed worthy of a passing mention.
A programme of land reform was mandated in South Africa’s new constitution in 1994. The programme was to include restitution, land tenure, and land redistribution. The new government set a target of redistributing 30% of the total of white farmer owned farmland (77.580 million hectares) within the first five years in government (1999). This target has been consistently moved over the years, and now the aim is to reach 30% by 2030. Several new proposals such as ‘Regulation of Agricultural Land Holdings Bill’,  aimed at limiting foreign ownership of agricultural land, and the ‘Expropriation Amendment Act Bill’, intended to enable expropriation without compensation, have stalled and failed to pass through Parliament. This progress has been criticised as too slow and some commentators have proposed that a new public body, a land agency, could ‘break South Africa’s land redistribution deadlock’.
The case studies demonstrate key regulatory standards for restricting land ownership in France, Finland, Switzerland and New Zealand. These examples were chosen to represent a diversity of models.
The rationales for these models vary and are not necessarily based on or related to managing scale and concentration of land ownership. However, all can be considered to fall within the public interest, specifically:
- preserving agriculture in France;
- protecting the Åland islands minority culture and language in Finland; and
- maintaining housing stock for residents in Switzerland and New Zealand.
The New Zealand model is unusual in that beyond a national interest test it has also recently established the benefit to New Zealand test. It is beyond the current scope of this research to say how this engages with free movement of capital and European Union compatibility.
The compensation arrangements for the French model are set out above. As the Finnish and Swiss models apply pre-emptively, as in to new owners of the land, they have not involved removing existing landowners or tenants from land. Therefore, they do not involve compensation. Instead these models serve to restrict land ownership on the basis of residence, ancestry, and nationality (Finland), citizenship (Switzerland), and national benefit (New Zealand).
The review of ECHR jurisprudence identifies where these models have been subject to actions at the European Court of Human Rights, and although none were deemed to contravene the European Convention on Human Rights. If these models had encountered successful legal challenges within national courts they would cease to continue in existing form.
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