“The Land Acquisition Act has been, and continues to be, pivotal to Singapore’s development.”
Indranee Rajah, S.C., Senior Minister of State for Law
The Land Acquisition Act (the Act) has been crucial to Singapore’s growth and has enabled the country’s public housing, industrial and other infrastructure developments. However, the Act did not follow Western models that compensate based on the potential value of the land. Instead, it provided for compensation on the basis of the acquired land’s pre-development value. For many years, this value was fixed at no higher than the market value of the acquired land as at 30 November 1973.
To address outdated compensation values as Singapore property prices increased over the years, a non-statutory “ex gratia” payment scheme came about. The Act was also amended over time. A major change came in 2007 when the Act was amended to provide for compensation based on the market value of the acquired land.
On 5 August 2014, the Singapore Parliament passed the latest amendments to the Act. Two major changes were highlighted when the Land Acquisition (Amendment) Bill [Bill No. 20/2014] was read for a second time in Parliament. The first concerned the removal of the betterment levy and the second authorised a management corporation to act on behalf of the subsidiary proprietors (i.e. unit owners) when the common property of their development is being acquired. There were also a number of technical and procedural changes passed.
BETTERMENT LEVY REMOVAL
The betterment levy is payable when the government acquires only part of the land belonging to a property owner. The value of the remaining land can actually go up in some cases (e.g. when an MRT station is to be built nearby). However, the law required the increased value of the remaining land to be deducted from the statutory compensation for the acquired part of the land as a betterment levy. As a result, the property owner was not compensated for the full market value of his acquired land. This levy has now been removed.
MANAGEMENT CORPORATION ACTING FOR UNIT OWNERS IN ACQUISITION OF COMMON PROPERTY
Under the law, common property (like a tennis court) is held by the unit owners as tenants-in-common in proportion to their respective share values. This meant that when any common property was being acquired, every unit owner had to go through the whole acquisition process. This included meeting the Collector of Land Revenue, engaging a property valuer and submitting claims for compensation under the Act. With the amendments, the management corporation is now empowered to act for the unit owners as well as use its funds for acquisition-related expenses.
TECHNICAL AND PROCEDURAL CHANGES
The technical and procedural changes in the latest amendments include giving the Land Acquisition Appeals Board the power to award costs against non-parties (like valuers or lawyers) who unnecessarily or unreasonably prolong the proceedings or increase its expenses. The changes also include removing the need for the Collector of Land Revenue to post hard copy notices of possession on the acquired land and extending the time for claimants to lodge notices and petitions of appeal.
The latest amendments to the Act are further steps to improve the land acquisition process and update the compensation scheme in Singapore. On the whole, the changes will lessen the negative impact of land acquisition on property owners while at the same time enhance the existing system. Therefore, they are likely to be well received by Singapore property owners and buyers.