Decoupled direct payments were introduced in the EU in form of the Single Payment Scheme (SPS) in 2005. The 2013 CAP reform changed both the implementation of the SPS and its budget. This is the first paper that analyzes the possible effects of the 2013 CAP reform on the EU land markets; in particular the capitalization of the SPS in land rental values. Our results suggest that the implementation elements of the 2013 CAP reform will largely determine the impact of the SPS on land markets. In particular, the reference period for entitlement allocation, regionalization, payment differentiation and budgetary changes. Our analysis also implies that a number of relatively minor policy changes could have substantial impacts on land markets.