dc LAW ONTHE PROPERTYReapplying Agricultural Parcelsfor Construction PurposesAgricultural parcels are units ofhigh interest for Republic ofCroatia, and they possess thegovernment’s special protection. Forthat reason, ways of disposing andusing agricultural parcels are fairlylimited. At the same time, owners ofagricultural parcels have special obligationsin terms of maintaining andprotecting such a parcel. Ways ofreapplying agricultural parcels for otherpurposes are also limited. In orderto change the function of an agriculturalparcel, specifi c regulationsfrom the Law on Agricultural Parcels(NN 152/08), which became valid onJanuary 1st 2009, must be honoured.This law is much stricter in terms of reapplyingoptions than some earlierregulations. That particularly relatesto the price of the reapplying processof a parcel that wasn’t located withinthe construction area on January1st 2009, but has been included afterthe changes in physical planning.Physical PlanningThe process of reapplying agriculturalparcels for other purposes, particularlyfor construction purposes, takesplace in accordance with physicalplanningdocuments and other regulations.The primary physical-planning documentsinclude several governmentleveldocuments, such as the Strategyof Physical Planning, and the Programmeof Physical Planning in Republicof Croatia. The goals, measures andactivities that are established in thesedocuments determine physical plansfor counties, the City of Zagreb, largecities, towns and districts. Physicalplanning is also produced for areaswith special statuses. During the processof creating a physical plan, professionalaffairs are conducted bygovernment departments in countyoffi ces or the Zagreb Agriculture Department,as well as the Agency ofAgricultural Parcels. This agency wasstarted in March 2009, based on theLaw on Agricultural Parcels. The processesof constructing physical plansalso include the Ministry of Agriculture.It provides its judgement on theproposed physical plans by countiesand the City of Zagreb, as well as itsconsent on the fi nal version of the136proposal for physical plans of largecities, towns and districts.The primary regulation in the fi eld ofphysical planning is the Law on PhysicalPlanning and Construction (NN76/07, 38/09). It precisely determinesthe term of a parcel within and outsideof the construction area. Thatmeans that a construction parcelcan be located within an area thatthe physical plan defi nes as constructionarea, or outside of it. Thefact of the agricultural parcel’s locationwill determine the height of theprice and other circumstances of thereapplying process. To go throughwith the reapplying of an agriculturalparcel that is located outside of theconstruction area, it is imperative tomake changes to the physical plan.According to the Law on Physical Planningand Construction, every spatialprocedure must be performed inaccordance with physical-planningdocuments, special regulations andthe location license. The Ministry ofAgriculture determines special circumstancesin the process of obtainingthe location license and certificates for performing construction inan area that isn’t deemed for constructionpurposes. Those circumstancesare established by the Ministry inaccordance to the Law on PhysicalPlanning and Construction, as wellas other regulations from that fi eld ofwork.Reapplying agricultural parcels forconstruction purposes is performed inaccordance with the previously statedregulations and documents andbased on the fi nal ruling that approvesthe construction process, with thecondition of paying immediate compensationfor the reapplying process,the height of which is separatelydetermined.Constructing sporting arenas andobjects in accordance with specifi claws is also considered reapplyingagricultural parcels for constructionpurposes.Reapplying Valuable AgriculturalParcels Is only Exceptionally AllowedThe Law on Agricultural Parcels statesthat that the particularly valuablearable agricultural parcels (P1)and the valuable arable agriculturalparcels (P2) cannot be used fornon-agricultural purposes, other thansome exceptional cases.The particularly valuable arable agriculturalparcel (P1) is the parcel ofhighest quality for agricultural cultivationbecause it allows the most efficient application of agricultural technologywith its shape, position andsize. The valuable arable agriculturalparcel (P2) is a parcel suitable foragricultural cultivation, considering itsnatural characteristics, shape, positionand size. The Ministry of Agricultureestablishes parcels that are deemedparticularly valuable (P1) or valuable
(P2) based on standards that are determinedby the agriculture minister.These standards are actually yet tobe determined, so the issue of compensationfor these types of parcels isresolved with the same set of rules asfor all other less valuable agriculturalparcels.As was previously stated, particularlyvaluable (P1) and valuable (P2) agriculturalparcels cannot be reappliedfor construction purposes, unlessin exceptional cases. Such reapplicationwill be made possible in theabsence of an agricultural parcelof lesser value, in situations of establishedinterest for the constructionof the object outside of the constructionarea, and in the situation of constructingeconomic buildings that areexclusively designed for agriculturalpurposes and the processing of agriculturalproducts.The Height of Compensation for theReapplying ProcessBased on the fi nal ruling that allowsconstruction on an agricultural parcel,an immediate compensation isgenerally paid. That compensationis paid because of the deduction ofvalue and overall surface of agriculturalparcels as units of interest for theRepublic of Croatia.The compensation ruling is deliveredby the authorized county departmentor the agricultural departmentof the City of Zagreb. The height ofcompensation for the reapplyingprocess is determined according tothe surface of the residential or otherconstruction unit, as well as on theinformation from the IRS regardingthe parcels’ average prices in that orneighbouring cadastre districts in theprevious calendar year.For all agricultural parcels that arelocated within the construction area,the height of compensation for thereapplying process is equal to 1%of the parcel’s average price. For aparticularly valuable (P1) or valuable(P2) agricultural parcel that is locatedwithin the construction area, thecompensation amounts to 5% of theparcel’s average price.For all agricultural parcels that werelocated outside of the constructionarea on January 1st 2009, but havebeen included in the constructionarea after the changes in the physicalplan, the compensation for thereapplying process amounts to 50%from the parcel’s average price withinthe construction area. If such acase involves a particularly valuable(P1) or valuable (P2) agricultural parcel,the compensation for the reapplyingprocess is equal to the parcel’saverage price within the constructionarea.Seventy percent of this compensationgoes to the government budget,and can be used exclusively for fi nancingexpenses of agricultural parcels’concentration that is performed bythe Agency for Agricultural Parcels.The remaining thirty percent goes tothe local budget of the county (or theCity of Zagreb) that includes the parcelin question. These funds are usedfor programmes and measures thatattempt to work on infertile parcelsand increasing the cultivating capacitiesof other agricultural parcels, inaccordance to a special statute thatprescribes conditions and methodsfor using compensation funds fromthe processes of reapplying agriculturalparcels.Professional associate Tana Patents d.o.o.Romana Matanovac VučkovićExceptions from the Obligation ofPaying the Compensation for the ReapplyingProcessThe Law on Agricultural Parcels determinesspecial exceptions wherethe investor is not obligated to paythe compensation for the process ofreapplying an agricultural parcel forconstruction purposes. The ruling onthe exception from paying this compensationis delivered by the countyeconomy department, or the agriculturaldepartment of the City ofZagreb.The obligation of paying the compensationfor the reapplying processwill not be enforced on entitiesthat construct buildings for fl oodingprotection, as well as watering ordraining systems and other waterbuildings. This obligation will also notbe enforced on entities constructingbuildings for protection and rescuing,as well as for buildings that serve forground preservation.This compensation will also not bepaid in cases of building objects andelements of municipal infrastructure,objects of traffi c infrastructure, orbuildings of public infrastructure. Entitiesthat build economic objects forexclusive agricultural purposes andfor processing agricultural productswill also not be obligated to pay thiscompensation.A special regulation also states thatCroatian war soldiers, as well as familiesof killed, imprisoned or disappearedCroatian war soldiers are not obligatedto pay the compensation forreapplying an agricultural parcel forconstruction purposes, unless specialregulations implemented their rightto residential housing. Furthermore,the compensation isn’t paid in casesof constructing public buildings on locationsthat were demolished duringthe war, as well as in cases of apartmentsand houses for the casualtiesof the War of Independence.Investors in buildings of up to 400 m2of gross surface are also not obligatedto pay this compensation ifthey’re building within the constructionarea, as well as investors in residentialobjects of government housingprogrammes.And fi nally, the compensation for theprocess of reapplying agriculturalparcels will not be paid in cases ofthe construction of golf courses thatserve no other function.