Land markets all over the world are diversely regulated, although a vast stock of empirical literature seems to suggest that unrestricted land market is the best policy design option. Since diversity of regulations proves this unlikely, it is surprising that little attention is paid in academic literature to theory that would allow to choose land market design based on welfare implications of various restrictions. In this paper, we build upon the framework described in the literature and develop a theoretical model that enables to infer an optimal choice of (maximum land holdings) restrictions in the presence of land market imperfections.