Right of Succession to a Farm

The Law of Succession for Agricultural Holdings prevents a farm from being economically broken up during inheritance division. Instead, it provides for the takeover of the farm by a single, suitable person. The other heirs receive monetary compensation in return. State laws consistently pursue this goal to ensure a sustainable farm structure.

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Special Inheritance Law for Agricultural Holdings

The Law of Succession for Agricultural Holdings represents an exception to the general succession rules under the ABGB. It applies when an agricultural or forestry enterprise is bequeathed and certain conditions are met. The relevant provisions are not uniformly regulated nationwide but are found in three different state laws:

• Anerbengesetz (AnerbenG) – applies in all federal states except Carinthia and Tyrol.
• Carinthian Hereditary Farm Act (KrntErbHG) – for farms in Carinthia.
• Tyrolean Farm Act (TirHG) – for so-called “closed farms” in Tyrol.

Definition of a Hereditary Farm

A farm is subject to the Law of Succession for Agricultural Holdings only if it is qualified as a so-called hereditary farm. The following criteria must be met for this:

• Agricultural and forestry enterprise with appurtenances and farmstead (no pure forestry).
• Objectively suitable to provide for at least two, maximum 40 persons (the average yield, including national and EU subsidies, is decisive).
• Ownership structure: Sole ownership by natural persons or co-ownership by spouses, registered partners, a parent with a child, or siblings.

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Who Becomes the Designated Heir?

The Law of Succession for Agricultural Holdings allows only one designated heir. This can be determined in various ways:

1. By testamentary disposition,
2. By mutual agreement of the appointed co-heirs,
3. By law, if no other provision has been made.

If there are several potential designated heirs, the law establishes an order of priority: Descendants raised on the farm take precedence over the spouse, who in turn takes precedence over other relatives. Descendants with agricultural training have priority. In case of equal rank, the closeness of the degree of kinship or local custom decides.

A designated heir does not have to accept the inheritance. If they do not accept it or are excluded, the right of takeover passes to the next eligible person. The right of takeover is neither transferable nor inheritable.

Assignment of the Farm and Acquisition of Ownership

The designated heir receives the farm undivided through judicial decree of inheritance. The farm is excluded from the estate, and ownership is acquired upon registration in the land register.

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Compensation for Co-heirs

The designated heir pays any co-heirs a so-called takeover price. The takeover price is monetary compensation. The amount of the takeover price is below the market value. Decisive for the amount of the takeover price is that the designated heir can economically sustain the farm.

The amount of the takeover price is:

• determined by the deceased themselves or
• agreed upon by the co-heirs through settlement or
• determined by the court based on equity, based on two expert opinions.

Claims of the Surviving Spouse or Partner

If the surviving spouse or partner is not the designated heir, they are entitled to a statutory usufructuary right. If the surviving spouse or partner manages the farm for the designated heir (e.g., their own child), they may also be granted a usufructuary right – until the designated heir reaches the age of 24 at the latest.

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Supplementary Inheritance Distribution upon Resale

If the designated heir sells the farm or parts thereof within ten years, any additional proceeds must be returned to the estate. The aim is to prevent speculation with the preferred farm takeover. The designated heir does not have to return the additional proceeds if they reinvest the proceeds or if their spouse or registered partner takes over the farm.

Agricultural Transfer Agreement vs. Law of Succession for Agricultural Holdings

Many owners transfer their businesses during their lifetime, often in the form of an agricultural transfer agreement. This is a contract of a special kind. However, in valuation, the Law of Succession for Agricultural Holdings is often applied analogously, for example, to calculate a takeover price.

Your Benefits with Legal Assistance

An inheritance case involving the Law of Succession for Agricultural Holdings brings with it particular challenges. The legal and economic requirements are high. Unclear ownership structures, an incorrect determination of the designated heir, or unfair compensation regulations can lead to lengthy disputes and jeopardize the continued existence of the farm.

Legal assistance from a specialized law firm like ours provides security. We will:

• check whether the Law of Succession for Agricultural Holdings applies
• guide you through the entire probate process
• ensure a legally secure decree of inheritance for the hereditary farm
• assist with the calculation and determination of the takeover price
• safeguard your claims as a co-heir or as the farm’s successor

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Frequently Asked Questions – FAQ

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