Acquisition of land

Land may be acquired through acquisition of land  or through a long-term lease agreement. The proceedings differ depending on whether it concerns private or publicly owned land.

Municipal land allocation

The land may be previously undeveloped and not subject to detailed development plan or it may be land with a detailed development plan, either developed or undeveloped. When land acquisition refers to private land, this is a commercial transaction between landowner and buyer. Acquiring publicly owned land is subject to certain rules.

A municipal land allocation is an agreement between a municipality and a land developer that gives the developer the sole right, for a defined period of time and under defined conditions, to negotiate with the municipality on transferring or letting an area of municipal land for building.

By using municipal land allocation agreements, municipalities can set conditions that control what is built: the form of tenure and the size of residential buildings for example.

Municipalities that allocate land shall adopt guidelines for land allocation. The guidelines shall include:

• the municipality's basis and goals for transferring or letting of land areas for building
• processing routines
• basic conditions for allocation of land
• routines and principles for pricing land.

Site leasehold

Site leasehold is a right to use and build on a property on similar conditions as with ownership. The ownership right to the land remains with the lessor, which may be the state or municipality. The party that has the right of use is called the leaseholder. The leaseholder owns the buildings, can mortgage the site leasehold and has the right to transfer it to another party.

The leaseholder pays an annual charge to the owner, which is known as site leasehold fee. Site leaseholds are let for a long period, usually at least 40 years. The fee is usually determined for ten year periods.