| Definition of the land price values |
According to the market price concept, the price of agricultural land (arable land, permanent grassland) is the price received/paid by the holder in free trade without deduction of taxes or levies and without the inclusion of subsidies. In practice, this means the actual price agreed upon by the transactors. Any taxes that the seller may have to subsequently pay as a result of selling the land, such as capital gains tax, would not be deducted from the price. The selling/purchase price of land should thus:
- exclude costs of transferring ownership (therefore lawyer's fees, registration taxes and real estate tax are not included in the land price);
- exclude deductible VAT;
- exclude the entitlements related to the land;
- exclude the value of any monetary compensation received by farmers for the sale/acquisition of the Utilized Agricultural Areas (UAA);
- exclude the value of any building on the sold/purchased agricultural land;
- exclude inheritance transfers
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According to the market price concept, the rent of agricultural land (arable land, permanent grassland) is the price received/paid by the holder in free trade without deduction of taxes or levies and without the inclusion of subsidies. In practice, this means the actual rental price agreed upon by the land holder and the lessee. Any taxes that the seller may have to subsequently pay as a result of selling the land, such as capital gains tax, would not be deducted from the rental price. The rental price of land should thus:
- exclude the entitlements related to the land;
- exclude deductible VAT;
- exclude the rentals of buildings or dwellings situated on it and any other expenses related to other assets except the agricultural land (current maintenance expenditure on buildings, buildings insurance, depreciation of buildings, rents paid for the professional use of non-residential buildings etc.)
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