Your search results

Is it Possible for the Government to Truly “Reclaim Your Home” in Singapore?

Posted by Jayson Ang on January 25, 2025

| 0

The Singaporean government possesses considerable authority to reclaim land, whether freehold or not, in accordance with the Land Acquisition Act. Thankfully, this authority has been exercised infrequently since the 1960s, a period during which it was essential for constructing mass housing and restructuring the city. However, this does not imply that it has been entirely unused; in fact, some private property owners have been taken aback by its application even in more recent times. Here’s an overview:

What is the Land Acquisition Act?

This legislation permits the government to reclaim privately owned land for developments that serve the public interest. Although its usage has been limited in recent years, there was a time between 1959 and 1984 when the act facilitated the recovery of approximately 177 square kilometers of land, which represented roughly one-third of Singapore at that period.

There are only three straightforward criteria:

5 (1) Whenever any particular land is needed –

For any public purpose
by any person, corporation or statutory board, for any work or an undertaking which, in the opinion of the Minister, is of public benefit or of public utility or in the public interest; or
for any residential, commercial or industrial purposes

This topic is not without its debates. You will encounter individuals who will passionately express their views on the acquisition of residential land for the purpose of selling it to private developers, questioning whether this action truly serves the “public utility” or is genuinely “in the public interest.”

(However, that is merely their perspective, and the government is legally permitted to proceed with such actions.)

Is the government truly capable of “reclaiming land at a low cost”?

This is a prevalent concern among landowners. What if your property is seized, leading to significant losses due to inadequate compensation? Let’s explore the origins of these anxieties:

Historically, compensation for land appropriated by the government did not reflect its value at the time of acquisition. For instance, in 1987, the compensation rates for land were based on their values from 1973. For properties acquired between 1987 and 1993, the values were aligned with those from 1986, and so on. This often resulted in financial losses since land values typically appreciate over time, which likely contributed to the longstanding grievances about how the government “acquires land at low prices.”

However, improvements have been implemented. On February 12, 2007, the legislation was revised to ensure that current values (i.e., those at the actual time of acquisition) are taken into account. Consequently, property owners since that date have benefited from much fairer compensation if their land is expropriated, in contrast to the experiences of previous generations.

Recent instances of land acquisition and the associated challenges include:

The Chuan Park Car Park Case
The church parking lot controversy
Residences displaced due to the Thomson-East Coast Line requirements
The case involving properties at 68 to 74 Thomson Road
Utilizing the area beneath your condominium

1. The Chuan Park Car Park Case

In June 2003, Chuan Park, a leasehold condominium completed in 1985, lost 220 square meters of land to accommodate the Circle Line. This area included approximately 17 parking spaces, and residents were quite frustrated when they learned that the compensation amount was just $1.

However, it was contended that this land acquisition would bring the Lorong Chuan MRT station much closer to Chuan Park, and that the anticipated increase in property values from the loss of those 17 parking lots made the decision relatively equitable.

While this reasoning may seem logical on paper, there are still ongoing debates about it today. Such situations can lead to misunderstandings, which often contribute to the spread of rumors regarding the government “taking properties” for little cost.

2. The Parking Lot Controversy

This is referenced in the same link above. In this case, a church lost part of its parking lot for just $1. The reason for this was a planning error that designated the area as a “road.”

(If the area is classified as a road, it’s not surprising that the owner received only $1, since the land cannot be utilized for anything else.)

Ultimately, it was a case of mislabeling, and the government later offered $64,000 in compensation once the situation was clarified. However, before this resolution, rumors circulated again about the government acquiring land for just $1.

(The residents of Chuan Park, who received $1 for their 17 parking spaces, likely had their own opinions on the matter!)

3. Residences displaced due to the Thomson-East Coast Line requirements

In 2016, the Thomson-East Coast Line (TEL) construction led to the acquisition of 15 properties in the Katong Area. This included six semi-detached homes and nine walk-up apartments, amounting to a total compensation of $45 million.

This resulted in an average compensation of approximately $1,270 per square foot. Some homeowners contested this amount, with one individual asserting that a fair valuation would range from $1,300 to $1,600 per square foot. Out of curiosity, we looked into this claim and found it to be incorrect.

Source: Square Foot Research

The average for 2016 was $1,189 to $1,273 psf for 2016, which last appreciated to $1,636 psf in May this year. So it was actually an average deal for the residents after you tack on the inconveniences of having to move.

4. The case involving properties at 68 to 74 Thomson Road

This building, which was freehold, was finished in 1964. Engineers determined that it was too hazardous to keep occupied because earthworks for the North South Corridor (NSC) posed a threat to its structural stability.

Details regarding compensation for this case remain unclear, though some owners felt they received inadequate compensation. Nevertheless, this incident served as a crucial reminder that owning a freehold property does not guarantee protection against land acquisition. It raises concerns about the risks associated with owning a highly central property—such as a freehold in a major neighborhood hub—especially when new road and rail connections are planned.

Additionally, many people might not anticipate that land acquisition would replace what is likely a more lucrative en-bloc sale.

5. Utilizing the area beneath your condominium

In 2015, the State Lands Act underwent amendments, granting you ownership of the land beneath your home up to a depth of 30 meters; anything beyond that depth falls under government jurisdiction. The amendment also enables the government to assert claims over airspace and subterranean space without needing to first claim the surface land, although this largely doesn’t impact homeowners directly.

So, what has sparked this newfound interest in claiming the land beneath residential properties? The answer seems to lie in the concept of underground cities. Rather than solely expanding upward, Singapore may look to develop downwards as well, concealing roads and other infrastructure below ground level. This approach could potentially alleviate our traffic issues by relocating roads underground, freeing the surface primarily for pedestrian use.

As of now, the implications of these changes remain to be seen, and it will likely be some time before they materialize. When the time comes, it will be interesting to observe how Singaporeans respond to the prospect of highways, train lines, and other constructions being built beneath their homes.

Should You Buy, Sell or Wait?

If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?

It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.

I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.

I can help you by:

Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.

You May Also Like …

All Buying Tips Opinion Selling Tips

Will New Launch Condos See a Drop in Prices Soon?

Jayson Ang – July 12, 2024 –

TLDR The real estate market in Singapore is experiencing a trend of lackluster bids for prime properties in various locations....

Mandarin Top 5

The Psychology of Property Investing: 5 Reasons Why Singaporeans Love Real Estate

Jayson Ang – May 4, 2024 –

Real estate investing has always been a popular way to grow wealth and secure financial stability. In Singapore, the love...

All Blog Posts Buying Tips

Unlock The Key To Selling A Home With A Perceived Disadvantage Like Being West-Facing Or Close To A Rubbish Chute – Here’s How!

Jayson Ang – January 26, 2023 –

TLDR When selling your house, turn perceived disadvantages into advantages. For sun-facing homes, use UV sheets and blinds to manage...

All Blog Posts

Calculating Your Property’s Annual Value in Singapore 2024: A Simple Guide!

Jayson Ang – December 15, 2024 –

TLDR Understanding your property's annual value is crucial for determining property taxes in Singapore. The annual value is based on...

All Buying Tips

Your Key to a Happy Retirement in Your HDB? Let’s Unveil The Mystery Behind the Lease Buyback Scheme!

Jayson Ang – March 30, 2024 –

TLDR The Lease Buyback Scheme (LBS) is gaining traction among older Singaporeans looking to boost their retirement income by selling...

Mandarin Top 5

5 Secrets To Successful Property Investing In Singapore

Jayson Ang – March 29, 2024 –

Investing in property is a popular option in Singapore, with many investors seeing it as a lucrative way to build...

All Reports

Increase in ABSD April 2023

Jayson Ang – April 27, 2023 –

TLDR The impending rise in ABSD (Additional Buyer's Stamp Duty) is expected to suppress investment demand, allowing local homebuyers to...

All Buying Tips Opinion

Craving Dream Homes in the Urban Jungle: The Singaporean Dilemma Unveiled

Jayson Ang – May 10, 2024 –

TLDR The housing landscape in Singapore reflects evolving aspirations and desires, especially among the younger generation. Owning private property is...

Mandarin Top 5

The 5 Hottest Neighborhoods in Singapore for Real Estate Investment

Jayson Ang – May 14, 2023 –

Hey everyone! Today I want to share with you the 5 hottest neighborhoods in Singapore for real estate investment. These...

Mandarin Top 5

Discover the Best Breakfast in Singapore: Top 5 Must-Try Spots!

Jayson Ang – February 28, 2024 –

Trying out some of the best breakfast places, I've put together a list of the top 5 must-try breakfast spots...

All Buying Tips

A Guide to Purchasing a New Launch Condo in Singapore in 2023

Jayson Ang – October 26, 2023 –

TLDR When buying a new launch condo in Singapore, start by planning your finances to determine loan and property limits....

All Buying Tips Opinion

Three Singaporeans Share Their Experiences of Co-Owning a Property with Friends

Jayson Ang – March 18, 2025 –

TLDR In Singapore, some individuals venture into property investments with unrelated partners, driven by opportunities and personal circumstances. Jim, leaving...

Mandarin Top 5

Top 5 : Common Characteristics Of Singapore Condos That Make Them An Attractive Investment Opportunity For Foreign Buyers

Jayson Ang – January 6, 2025 –

Singapore, a thriving hub of business and commerce in Southeast Asia, has become an attractive destination for foreign investors looking...

Mandarin Top 5

Top 5 : Benefits of Investing in Older vs. Newer Singapore Property Market Condos for International Buyers?

Jayson Ang – January 14, 2025 –

Singapore's property market has long been an attractive investment destination for international buyers, offering a stable and well-regulated environment with...

Mandarin Top 5

How to Build a Property Empire in Singapore: Scaling Your Investments

Jayson Ang – May 8, 2024 –

Real estate investing is a popular way to build wealth and generate passive income. However, like any investment, it comes...

All Buying Tips

Should Foreign Buyers Be Deterred By the 30% ABSD?

Jayson Ang – December 7, 2022 –

TLDR Foreign buyers interested in private residential properties in Singapore is a common sight due to the country's positive reputation...

All Blog Posts Opinion

Are We Truly Headed For A Slowdown? How Will This Affect Property Prices?

Jayson Ang – December 9, 2022 –

TLDR The pandemic-induced recession has surprisingly boosted property prices in Singapore, defying conventional economic trends. Factors like cost-push inflation, limited...