NSW Government Review of Land Acquisition

The NSW Government is finally conducting a thorough review into the Land Acquisition (Just Terms Compensation) Act 1991 (‘the Act’) in response to the 2022 parliamentary inquiry into the acquisition of land in relation to major transport projects. We are delighted to see this review, as whilst previous reviews have mitigated the prejudice against owners of government-acquired land, they have fallen far short, to the point where we often refer to the Act as the ‘Unjust Terms Act’. Of course, this is no laughing matter as owners continue to be treated in some serious and unjust ways.

One of the worst shortcomings in the Act is the disparity in the amount of compensation that is paid to an owner of land who is an investor. An investor in land, who does not use it and instead rents it to a third party, is only compensated by receiving the market value of the land. Investors are not reimbursed for any costs associated with purchasing another property to replace their asset, such as stamp duty, conveyancing, and bank fees. Most investors have lost hundreds of thousands of dollars, and they are understandably upset to be informed that there is nothing we can do about it.

Even worse off are those owners who occupy the land but do not get compensated for these costs because they have a company established to operate their business from the premises but they still own the land in their own name. This is good accounting advice, and most business owners have their land in one name and business in another, yet when it comes to compulsory acquisition, find that they too do not qualify for the payment of stamp duty and other associated costs.

If we could only get one change out of this review, the change to stamp duty and related costs to replace the asset lost by acquisition would be at the top of the list based on our first-hand experience of poor treatment of owners. No owner should be entitled to less compensation, regardless of the legal entity in which they own their land or how they use it. An asset is an asset, and individuals should be treated equally under the Act. It is unjust to treat them any other way and certainly not in the spirit of an Act with the word ‘Just’ in its title.

Please make any submissions about your experience to the government review via this link, or we will gladly add your own experience and comments to ours; simply get in touch.

Many thanks,
Flo Mitchell