How is compensation calculated if my property is compulsorily acquired by the Commonwealth?
Section 55 of the Lands Acquisition Act 1989 states that the following principles apply:
(1) The amount of compensation to which a person is entitled under this Part in respect of the acquisition of an interest in land is such amount as, having regard to all relevant matters, will justly compensate the person for the acquisition.
(2) In assessing the amount of compensation to which the person is entitled, regard shall be had to all relevant matters, including:
(a) except in a case to which paragraph (b) applies:
(i) the market value of the interest on the day of the acquisition;
(ii) the value, on the day of the acquisition, of any financial advantage, additional to market value, to the person incidental to the person’s ownership of the interest;
(iii) any reduction in the market value of any other interest in land held by the person that is caused by the severance by the acquisition of the acquired interest from the other interest; and
(iv) where the acquisition has the effect of severing the acquired interest from another interest, any increase or decrease in the market value of the interest still held by the person resulting from the nature of, or the carrying out of, the purpose for which the acquired interest was acquired;
(b) if:
(i) the interest acquired from the person did not previously exist as such in relation to the land; and
(ii) the person’s interest in the land was diminished, but not extinguished, by the acquisition;
the loss suffered by the person because of the diminution of the person’s interest in the land;
(c) any loss, injury or damage suffered, or expense reasonably incurred, by the person that was, having regard to all relevant considerations, including any circumstances peculiar to the person, suffered or incurred by the person as a direct, natural and reasonable consequence of:
(i) the acquisition of the interest; or
(ii) the making or giving of the pre acquisition declaration or certificate under section 24 in relation to the acquisition of the interest; other than any such loss, injury, damage or expense in respect of which compensation is payable under Part VIII;
(d) if the interest is limited as to time or may be terminated by another person—the likelihood of the continuation or renewal of the interest and the likely terms and conditions on which any continuation or renewal would be granted;
(e) any legal or other professional costs reasonably incurred by the person in relation to the acquisition, including the costs of:
(i) obtaining advice in relation to the acquisition, the entitlement of the person to compensation or the amount of compensation; and
(ii) executing, producing or surrendering such documents, and making out and providing such abstracts and attested copies, as the Secretary to the Department requires.
The Act also details the matters to be disregarded in assessing compensation. These include:
(a) any special suitability or adaptability of the relevant land for a purpose for which it could only be used pursuant to a power conferred by or under law, or for which it could only be used by a government, public or local authority;
(b) any increase in the value of the land caused by its use in a manner or for a purpose contrary to law;
(c) any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the purpose for which the interest was acquired; and
(d) any increase in the value of the land caused by the carrying out, after a copy of the pre acquisition declaration or certificate under section 24 in relation to the acquisition of the interest was given to the person, of any improvements to the land, unless the improvements were carried out with the written approval of the Minister.
An expert valuer at Rushmore can assist you formulate a valuation for the purposes of the Commonwealth Lands Acquisition Act. For a complimentary initial appointment, please call 1800 454 622 or contact us.