Land Acquisition and Compensation in Singapore

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Wherever you are in Singapore, you are likely to see some form of construction taking place. This is not surprising given that the government regularly upgrades Singapore’s infrastructure to meet its changing needs. The new Downtown line and the southbound section of Lornie Highway are just a few examples of recent upgrading projects.

 These construction projects often involve land which citizens own and live on. Acquiring the properties in question does not always go smoothly for the government despite compensation being provided to owners.  

The Land Acquisition Act

 Implemented in 1966, the Land Acquisition Act allows the Singapore government to perform compulsory land acquisition for public development. The Land Acquisition Act requires that acquisitions are justified, and mandates that compensation is appropriately assessed and promptly disbursed.

 In 2007, the Act was amended. The amended Act required the government to pay owners compensation equal to the market value of their property. This stemmed from public feedback that compensation to owners was insufficient.

How Compensation for Land Acquisition is Calculated

Today, property valuation is conducted by a licensed property valuer. This valuation is based on prices for recent comparable transactions, as well as the valuer’s professional opinion. The latter takes into account factors such as location, age, and accessibility of the property.

 Some owners also receive ex-gratia payment. This is a discretional payment to compensate for considerations such as a property’s en bloc potential.

Compensation Value - A Typical Area of Contention

Many owners are reluctant to relocate due to the sentimental value of their homes, some having stayed there their entire lives. However, a more common issue owners have with land acquisition has to do with what they perceive as insufficient compensation.

 Some years ago, owners of a few landed properties along Merpati Road delayed relocation intentionally. Not abiding by the August 2015 deadline set by the government, these owners conceded to the government only in May 2017. Claiming that compensation was insufficient to buy similar properties in the area, they eventually relocated to HDB flats.

 Despite the 2007 amendment, many owners impacted by the Land Acquisition Act feel that the government’s compensation does not reflect the “true market value” of their property.

 According to these individuals, the “true market value” should be the market value of their homes prior to land acquisition announcements. In other words, market value calculations did not reflect the true market value, as they were performed only after the announcement. Since these homes were sold with the knowledge of construction plans in the area, they were sold at a lower price.

To conclude, the Land Acquisition Act has gone through a number of amendments to reach its current form. This seems to indicate that the government has been responsive to concerns of property owners. Given that infrastructural upgrading in Singapore is likely to be a perennial phenomenon, Singapore’s Land Acquisition Act may need to continually evolve to cater to the concerns of owners.

 

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