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Land acquisition: Owners to get better compensation

The Straits Times | Mok Fei Fei | Friday, Aug 8, 2014

Senior Minister of State for Law and Education Indranee Rajah.

A new law passed yesterday will give better compensation for owners who have part of their land acquired by the Government.

The Land Acquisition (Amendment) Bill has removed what is known as the "betterment levy", among other reforms.

The levy required that any increase in the value of the owner's remaining land be deducted from the compensation he is given for the acquired land.

It was imposed because the value of the land remaining in the owner's hands could increase due to the improvement works undertaken on the acquired land.

Senior Minister of State for Law Indranee Rajah told Parliament that removing the levy means owners will receive compensation equivalent to the full market value of the acquired land.

"The amendment continues in the spirit of the previous set of amendments to the Land Acquisition Act in 2007, which pegged compensation for acquired land to the market value which a bona fide purchaser would reasonably be willing to pay for the property," said Ms Indranee during the second reading of the Bill.

Non-Constituency MP Lina Chiam, the only MP to speak during the debate on the Bill, asked if removing the levy will hit government coffers.

"If we are to now increase the compensation for land owners, taking into consideration the benefits of the public developments, we will be losing taxpayers' money to enrich the land owners on an 'after the fact' basis," she said.

Ms Indranee reiterated that the ultimate aim is to ensure that land owners receive a fair market value for the part of their assets that is compulsorily acquired.

"With respect to the betterment levy, it is not the case that one is unjustly or unfairly enriching the owner," Ms Indranee added.

Other amendments of the Bill include improving the efficiency of the land acquisition process.

One change will enable the management corporation of a strata-titled development to act on behalf of individual unit owners in the acquisition of common property.

Another amendment has removed the need to paste physical notices for site possession.

SLP International research head Nicholas Mak thinks that while removing the betterment levy is good for land owners, it will not have much impact on the market.

"A lot of the part-lot acquisitions that took place in the past was because of MRT construction work or the building of expressways," he noted.

"But these days, much of such work appears to be winding down or the Government would use state land where possible instead."

Part-lot acquisitions of the kind cited by Mr Mak were employed to get land for the North-East Line MRT construction.

feimok@sph.com.sg

This article was published on Aug 6 in The Straits Times.


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