Selling or Leasing Farmland in Germany: the Maths, the Tax, the Approval

On the national average for 2025, a hectare of arable land sold for €42,134, while a new lease brought about €511 a year. At 3 percent interest on the proceeds, keeping the land on an agricultural lease therefore only pays if it gains more than about 1.8 percent a year in value. If the land is business property, tax on the sale can lower this threshold considerably, to about 0.7 percent in our example. And if the land is a candidate for solar or storage, in many places the maths reverses completely. This guide works it through and shows when a sale is still the better choice.

A note about ourselves: ENLAPA is a marketplace for solar and storage land, so it has an interest in land being leased. That is why the assumptions are stated openly, and why one section names the cases in which you are better off selling.

Key Takeaways

• Purchase value 2025: €42,134/ha for arable land nationally, €91,500/ha in North Rhine-Westphalia. In Brandenburg, agricultural land stood at €13,218/ha in 2024.

• Agricultural rent does not beat the interest on the proceeds. Keeping the land only pays through appreciation, from about 1.4 to 2.1 percent a year depending on the region.

• Tax often matters more than the price. Private assets: tax-free after ten years. Business assets: always taxable, even if the farm has long been leased out.

• Approval: above the state's exemption limit (0.15 to 2 ha) a sale needs approval. The authority has one to three months.

• Leased land can be sold; the buyer takes over the lease (§ 593b BGB).

• Plot size changes everything: solar generally becomes an option from about 5 hectares, storage from about 1 hectare near a substation. Below that it usually comes down to an agricultural lease or a sale.

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The maths for 5 hectares

Three regions, the same area. The calculation uses official purchase values and new rents, an assumed return of 3 percent on the sale proceeds, and the usual market range of €3,000 to €5,000 of solar rent per hectare. All values are before tax.

Four things follow from this.

On agricultural rent alone, selling always wins. Rent is 0.9 to 1.6 percent of the purchase value. Anyone who keeps the land is therefore betting on it as a store of value. That is not a bad idea: in North Rhine-Westphalia prices more than tripled from 2009 to 2023. But it is no one-way street either: they fell there by 6.1 percent in 2024 and 1.5 percent in 2025, and nationally 2024 saw a rise of 5.4 percent and 2025 a fall of 0.9 percent.

Solar rent shifts the maths, but not equally everywhere. At the market midpoint of €4,000 per hectare, 5 hectares bring €20,000 a year. The sale proceeds thus equal about 3 years of solar rent in Brandenburg, a little over 10 years at the national average, and almost 23 years in North Rhine-Westphalia. A basic term of 20 years plus extension options is usual, and the land remains yours afterwards. In Brandenburg a sale of suitable land is therefore hard to justify; in the high-price regions of the west it can hold up even against solar.

Waiting is cheap, a sale is final. At the national average, for 5 hectares, it costs about €3,765 a year to go on leasing the land rather than investing the proceeds. A field once sold, however, does not come back. If you are unsure, you can clarify the options first at little cost.

Solar rent is a possibility, not an entitlement. The full rent generally starts only with construction or commissioning. Before that there are often several years of development plan, permit and grid connection, and not every project gets built. A reservation fee can be agreed for this period, and the land can usually go on being farmed until construction starts. Details are in the overview of photovoltaic lease prices.

How tax changes the result

Suppose the 5 hectares belong to business assets and stand in the books at €15,000. Of the €210,670 proceeds, €195,670 is then taxable gain. With an assumed tax burden of 40 percent, €78,268 goes to the tax office, leaving €132,402. The interest on that is only €3,972 a year. The appreciation needed for keeping the land to win thus falls from 1.8 to about 0.7 percent.

The tax is not cancelled in the event of a later sale, only deferred. The advantage of keeping the land is still real for as long as the money is working or the land stays in the family. Only a tax adviser can calculate what your burden would actually be.

The question before all others: how big is your land?

Whether a lease for solar or storage is on the table at all depends first on size. That spares you both false hope and a hasty sale.

Size alone does not make a project. Three rules are especially useful:

• Ground-mounted solar in the outer zone is privileged without a development plan only on a strip of at most 200 metres along motorways and two-track railways of the main network (§ 35(1) no. 8 b BauGB). Otherwise it generally needs the municipality and a development plan. More under approval of ground-mounted photovoltaics.
• Standalone battery storage is privileged in the outer zone if it has at least 4 MW and lies at most 200 metres from the plot boundary of a substation or a power plant of 50 MW or more (§ 35(1) no. 12 BauGB). Per municipality this is limited to 0.5 percent of the municipal area and at most 5 hectares. Details in the guide to battery storage land.
• Agrivoltaics on your own farm is privileged up to 2.5 hectares of plant footprint, once per farmstead and in a spatial and functional connection with the business (§ 35(1) no. 9 BauGB). That is a route for active farmers, not a lease model for third parties.

And above all this stands the grid connection: only the grid operator can say whether and where power can be fed in. Our area check determines distances and the responsible operator, but gives no connection commitment.

When selling is the better choice

Selling is no defeat. In these cases there is much to be said for it:

1. You need the money for a specific purpose, such as clearing farm debt, retirement provision or paying out co-heirs, and a loan on the land would cost more.
2. The land is private property, the ten-year period is over and nobody in the family wants to keep it. Then no income tax falls on the gain.
3. A community of heirs cannot agree. A joint sale is almost always better than a partition auction.
4. You own a small, remote plot with no solar or storage option. To a neighbouring farm it may be worth more than to you, and with small rents the administration often hardly pays.
5. You are in a high-price region. At over €90,000 per hectare, the interest on the proceeds can come close to a solar rent, provided the sale is not too expensive in tax terms.

When leasing is the better choice

1. The land is business property with a low book value. Tax on the hidden reserves can consume a large part of the proceeds.
2. The land is large enough for solar or storage and the initial check is not clearly negative. Then a rent of €3,000 to €5,000 per hectare is a real possibility, and more for storage.
3. An inheritance tax retention period is still running. A sale can retroactively cost you the relief.
4. You do not need the capital. Land cannot simply be bought back if your circumstances change.
5. The next generation might want to use the land. A lease ends; a sale does not.

If you want to keep the solar option open, think of it at the next agricultural lease: a short term or an agreed termination option in the event of energy use saves a costly settlement with the tenant later. The periods that otherwise apply are explained in the guide on terminating an agricultural lease.

What farmland really brings on sale

Averages are a starting point, not an offer. According to the Destatis figures analysed by the federal association of non-profit land companies (BLG), the national average for arable land in 2025 was €42,134 per hectare, 1.6 percent below 2024. Grassland rose by 15 percent to €28,587. Across all land it was about €35,000, with €51,830 in the west and €17,470 in the east. State values and rent trends are in the guide to lease prices for arable land.

Within one state the range is similarly wide. In North Rhine-Westphalia in 2025, arable land ranged from about €25,400 in the district of Siegen-Wittgenstein to €145,900 in the district of Borken. The influence of size also shows there:

This is an average across different locations and not a pure size premium, but it shows the direction: splitting a large plot into small pieces does not automatically earn more. Nationally, however, prices in 2025 fell mainly for purchases of 5 hectares and above. So no rule of thumb holds everywhere.

For your own land, four things count: the standard land value of the valuation committee (via BORIS-D or the state portal), the soil quality, the shape and access, and any current lease. The market is also thin: in 2025, 73,584 hectares changed hands nationwide, just under 4 per mille of the land. If you are in no hurry, you can wait for the right buyer.

Tax on selling farmland

This section is for orientation and does not replace tax advice. The first question is always: where does the land stand?

Private assets: the ten-year period

Under § 23(1) no. 1 EStG, a gain on the sale of a private plot is only taxable if no more than ten years lie between acquisition and sale. For acquisitions without consideration, § 23(1) sentence 3 EStG counts the acquisition by the predecessor. If your mother bought the field in 1990 and you inherited it in 2024, the period is long over.

Business assets: always taxable

If the land belongs to an agricultural or forestry business, no period applies. The gain is the sale price less selling costs and book value. Because land is not depreciated and has often stood in the books at low values for decades, almost all the proceeds are gain.

The most expensive mistake goes: "The farm has been leased out for 30 years, so the land is private." Under § 16(3b) EStG (applied to agriculture via § 14 EStG), leasing a business as a whole does not count as ceasing it, as long as cessation is not expressly declared to the tax office or facts showing it become known to the tax office. The land can therefore still be business property today, including in the hands of heirs.

The €45,000 allowance from age 55 (§ 16(4) EStG) is tied to the sale of a business, part of a business or a share in a business. Selling individual plots generally does not qualify.

Deferring the tax: §§ 6b and 6c EStG

If you keep farming and reinvest, the gain from land can be rolled over onto newly acquired land, growing crops or buildings. For this, the land sold must have belonged without interruption to the fixed assets of a domestic business for at least six years. If the investment is not yet settled, a reserve is possible, which generally must be used within four financial years. If it is released without investment, a surcharge of 6 percent per year applies. § 6c EStG opens this route even without balance-sheet accounting. The tax is deferred by this, because the book value of the new asset falls accordingly.

Who pays the real estate transfer tax

The real estate transfer tax, 3.5 to 6.5 percent depending on the state, is nearly always borne by the buyer under the contract. Under § 13 GrEStG, however, both parties owe it. If the buyer does not pay, the tax office can therefore also turn to you.

And if I lease instead?

Tax applies then too, but on an ongoing basis. With business property, a solar lease can also trigger a withdrawal from business assets and change the property tax. That is covered in the guide on taxes when leasing farmland for solar.

Approval: the Grundstückverkehrsgesetz and pre-emption

Unlike with a building plot, with a field you do not alone decide who buys. The state reviews the sale so that land stays with farmers.

When approval is needed. The sale of agricultural and forestry land and the contract for it require approval under § 2 GrdstVG. The states set exemption limits. According to the overview of the German Notary Institute (as of 2019), they range from 0.15 hectares in Saarland and 0.25 hectares in Hesse, Thuringia and Bremen to 2 hectares in Brandenburg, Mecklenburg-Vorpommern, Saxony-Anhalt and Schleswig-Holstein; Bavaria, Lower Saxony, North Rhine-Westphalia and Baden-Württemberg are at 1 hectare, Baden-Württemberg under its own statute. In Bavaria, sales over the past three years are added together. This may have changed. The binding answer comes from the land transactions authority, usually at the district.

How long it takes. Under § 6 GrdstVG the authority has one month, two by interim notice, and three if the pre-emption right must be decided. If it misses the deadline, approval is deemed granted.

When it can be refused. § 9 GrdstVG names three grounds:

• an unhealthy distribution of land, typically when a non-farmer buys while a farmer urgently needs the land,
• an uneconomic reduction in size, generally when an agricultural plot falls below one hectare through division (§ 9(3) GrdstVG),
• a gross disproportion between price and value.

On the third point the Federal Court of Justice has drawn the line: the yardstick is the market value, including what non-farmers pay. A price more than half above it is generally a disproportion. Approval can only be refused, however, if at the time of the last factual decision a farmer is willing to pay about the market value (BGH, decision of 26 April 2018, BLw 3/17). As an example: if the market value is €40,000 per hectare, things get delicate from about €60,000.

Who can step in. Under § 4 of the Reichssiedlungsgesetz, the non-profit settlement company has a pre-emption right for plots of two hectares and above if approval under § 9 GrdstVG would probably have to be refused. The states can change the threshold; in Bavaria it is one hectare. Sales to a spouse or close relatives and to public-law bodies are generally exempt from the pre-emption right. If the company exercises the right, it takes the place of your buyer.

When no approval is needed. § 4 GrdstVG exempts, among other things, sales involving the federal government or a state, and plots within the scope of a development plan, provided they are not designated there as agricultural or forestry land and do not concern a farm's operational site.

Selling leased farmland

You may also sell leased land, and the tenant need not agree. Under § 593b BGB, §§ 566 to 567b BGB apply accordingly: the buyer steps into the current lease. For the tenant, only the payee changes.

For you as the seller, this has three consequences:

• The price depends on the remaining term. Anyone tied to a low old rent for years pays less than for free land. A farmer who wants to work the land personally can only use it after the lease ends.
• The tenant has no statutory pre-emption right. The lease provisions of the German Civil Code (§§ 585 to 597) do not provide one. It applies only if contractually agreed, so read the lease carefully beforehand. Even so, the tenant is often the obvious buyer and the first call.
• Termination is not a sales tool. A fixed-term lease runs its course; an open-ended one needs up to two years' lead time. The framework is in the guide to the agricultural lease agreement.

Selling farmland for photovoltaics: why developers prefer to lease

Many owners ask whether a solar developer will buy the land. That is not the norm. The most common model is a pure land lease: the developer ties up capital in the plant and secures the land through a long use agreement with an easement.

If a purchase offer does come, three questions belong on the table:

1. Can the sale be approved? Before a development plan is in force, the developer is generally a non-farmer buying arable land. If the price is far above market value and a farmer is ready to buy, refusal looms. Have the contract drafted so that it is clear what happens in that case.
2. What are you giving up? At €4,000 per hectare, a price of €42,000 equals a little over ten years of solar rent. Over 20 to 30 years the total rent is higher, and the land stays yours. Against this stands safe money today, versus the risk that a planned project is never built.
3. What happens if it fails? If the purchase is conditional on the project being approved, or based on a purchase option, the land may be blocked for years. Do not sign an option without an appropriate fee and a clear end date.

If you lease first, you can still sell later. The buyer then takes over the contract along with the running rent. The reverse is not possible.

Selling inherited farmland

Heirs face this question especially often, and three points set their case apart:

• You inherit the holding period. The predecessor's ownership counts, and for private assets it has usually long expired.
• You also inherit the business assets. If the land comes from a farm, the section on business assets applies. Check this before any conversation with a buyer.
• Relief can be withdrawn retroactively. If relief under § 13a ErbStG was used for agricultural assets, a retention period of five years applies, or seven under the full-relief option. A sale within this period can cost you the relief.

With several heirs, all must take part: under § 2040 BGB they can only dispose jointly. However, any of them can demand partition under § 2042 BGB. Before it comes to a partition auction, it is almost always worth working through a sale or a takeover against compensation once more. A lease can bridge the time until everyone agrees. More on valuation, allowances and the land register is in the guide to inherited farmland.

Selling grassland: what is different

For the procedure, nothing: approval, pre-emption and tax apply in the same way. The figures are different. In 2025 the national average purchase value was €28,587 per hectare, and the rent most recently €212. That is about 0.7 percent of the purchase value. At 3 percent interest, the appreciation needed for keeping the land on an agricultural lease is thus about 2.3 percent a year. For solar, support areas and nature conservation carry particular weight on grassland. What applies there is covered under lease meadow and grassland for solar.

The sale in seven steps

1. Gather documents: land register extract, parcel data, current leases, and for inheritances the certificate of inheritance and the inheritance tax assessment.
2. Clarify tax status: private or business, book value, retention periods. This goes to the tax adviser before any price is discussed.
3. Check suitability for solar and storage: from about 1 hectare if storage is near a substation, from about 5 hectares for solar. It takes seconds and avoids the most expensive mistake.
4. Establish the value: standard land value, sales nearby, and for larger plots a valuation report.
5. Find a buyer: tenant, neighbouring farms, the land company or a tender. A top bid far above market value is not automatically approvable.
6. Notarise: a land purchase contract must be notarised (§ 311b BGB). The notary usually also applies for approval and obtains the necessary declarations.
7. Approval, payment, transfer: after approval and the tax office's clearance certificate, the purchase price falls due and ownership is transferred.

Allow several months in all. Step 7 alone can take up to three months because of the approval deadline.

Frequently asked questions about selling farmland

Conclusion

Selling farmland is a decision that cannot be reversed, and rental yield alone is misleading here. So settle three things first: whether the land is private or business property, whether approval is needed and achievable, and whether the land is large enough and well enough located to be more than farmland. At about 5 hectares for solar and about 1 hectare near a substation for storage, that last check is always worthwhile. If the answer is no and the money is needed, selling is a sensible choice. If it is open, you should not sell first.

If your land fits, the next steps are under lease arable land for solar. The first check is free and takes seconds: check your land at no cost.

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This article provides general orientation and does not replace legal or tax advice. The law on agricultural land transactions is partly state law, and the sample calculations rest on averages and assumptions. Have your case reviewed before you sign a contract.

Sources: Federal Statistical Office (Destatis), purchase values for agricultural land, as analysed by the federal association of non-profit land companies (top agrar/AgE, 16 September 2026: arable land €42,134 and €42,800, grassland €28,587, agricultural land about €35,000, 73,584 ha, decline mainly from 5 ha); Chamber of Agriculture NRW and Destatis (top agrar/Wochenblatt, 5 October 2026: NRW arable land €91,500, district range, size classes, west/east, rates of change); Statistical Office Berlin-Brandenburg, report M I 7-j/24 (Brandenburg €13,218); rents: see sources in the guide to lease prices for arable land (Destatis, Agricultural Structure Survey 2023; German Farmers' Association, Situation Report 2025/26); Grundstückverkehrsgesetz §§ 1, 2, 4, 6, 9, 12; Reichssiedlungsgesetz § 4; Income Tax Act (EStG) §§ 6b, 6c, 14, 16, 23; Inheritance Tax Act (ErbStG) § 13a; Real Estate Transfer Tax Act (GrEStG) § 13; German Civil Code (BGB) §§ 311b, 448, 566, 593b, 2040, 2042; Federal Building Code (BauGB) § 35(1) nos. 8, 9, 12 (all gesetze-im-internet.de, as of November 2026); Federal Court of Justice, decision of 26 April 2018, BLw 3/17; German Notary Institute, exemption limits in land transaction law (as of 1 January 2019); Bavarian Agricultural Structure Act Arts. 2, 3. The 3% return and 40% tax burden are ENLAPA's assumptions; the solar rent ranges and size indications rest on ENLAPA's market observation.