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Brussels, 4 May 2001

Commission proposes transition periods for purchase of real estate in candidate countries

Recognising the high political sensitivity of this issue, the European Commission today proposed to the fifteen EU Member States to allow the candidate countries who wish to limit the acquisition of agricultural land and secondary residences by other EU nationals to do so during a period of respectively 7 and 5 years after their accession to the European Union. However, a review should take place after three years to determine whether this transitional period can be shortened or even lifted. Certain types of activities, in particular self employed farmers who wish to establish themselves and reside in the future new Member States, are not concerned by the proposal.

The Commission has recognised the high political sensitivity of purchasing of real estate in a majority of candidate countries, in particular the issue of investment in agricultural and forestry land and the acquisition of secondary residences. At the same time it is important for the EU to strike the right balance between the candidate countries' considerations and the integrity of the Single Market.

The Commission's proposal is therefore to grant the concerned candidate countries a 7-year transitional period for the purchase of agricultural and forestry land and a 5-year transitional period for the purchase of secondary residences by nationals of other EU Member States. During this period, the countries concerned would have to use objective, stable, transparent and public criteria for the authorisation procedures for real estate acquisitions. These criteria should not differentiate between other EU residents.

The proposed transitional period on agricultural and forestry land relates to Hungary, the Czech Republic, Poland, Slovakia, and Bulgaria; for secondary residences to Hungary, the Czech Republic and Poland (1).

The Commission also proposes that a review should take place after 3 years. This review would be based on a factual report from the Commission, which may be accompanied by a proposal to the Council of Ministers. The Council would then act unanimously to shorten of lift the transitional period.

The Commission also suggests to exclude certain type of activities from the transitional period. The most important is the self-employed farmer who wants to reside in the future Member States. Freedom of establishment is a fundamental freedom for the EU citizen on the Single Market.

The "roadmap" for the accession negotiations, which was endorsed by the European Council in Nice, foresees that the EU should define its common position on the chapter "free movement of capital" where the issue of purchase of real estate is addressed before the end of the Swedish presidency. As for all the other negotiation chapters, unanimity of the Member States is required to adopt a common position of the EU.

(1)The negotiation chapter freedom of capital is already provisionally closed with Cyprus, Estonia, Slovenia and Lithuania. A transitional period of 5 years was granted to Cyprus for the acquisition of secondary residences. Estonia, Slovenia and Lithuania did not request transitional periods.

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