- How Much Money Is Needed To Invest In Rental Property?
- Should A Real Estate Investor Get An Agent’s License?
- 5 Big Factors That Affect The Costs Of Renovating Your Home
- SIBOR Hike – What You Can Do With Your Current Loan
- 6 Basic Don’ts Of Real Estate Negotiation Tactics
- Will New Condo Relaunches Trigger The Great Property Sale We Have All Been Waiting For?
- 10 Proximity Amenities That Add Value To Real Estate
- How To Get Personal Loans More Easily With Good Credit
4 Key Government Rights In Land And Private Property
In many ways, after you have paid for a property either with cash or some sort of financing like a typical mortgage, you still do not fully own it.
This can send a shock wave down your spine. And it’s not a surprise.
For too long home and land owners think that they have full ownership and control over the home they have bought. Although that is true, it is not really 100% true to the word.
Because no matter how much you have purchased a piece of real estate for, whether it’s private property or public housing, the government retain some very powerful rights over it.
1) Property tax
The concept of property tax goes back centuries. So deep is it embedded in the history of civilization that it would probably never be abolished in developed countries.
We have been conditioned to think that it is just the way it is.
Just because the title to a parcel of land has your name on it does not give you absolute ownership to it. Owners still have to pay a “perpetual installment” to the government for the rights to own it.
Failing which could result in the authorities seizing the property and sell it off on the open market in order to recover unpaid taxes.
Taxes levied against land is a very big source of government revenue. And for many, the system of collection is a fair method of collecting monetary contributions to the country because:
- The more land a person or entity owns, the more wealthy he is considered to be
- Land ownership is easily identified and near impossible to hide
If you are livid over why you should be responsible in paying property tax, consider that money is needed for the state to continue operating effectively.
This directly impacts the funding for things like the police force, public facilities, military defense etc.
2) Eminent domain
This is a term used to describe the right of the government to takeover privately owned real estate despite the owners’ wishes.
This often happens for land that is required for infrastructure works like highways, major pipe lines, railroads etc.
Negotiation for purchase usually take place when the government decides that particular real estate is needed for city planning. And for the most part private owners are able to agree to a form of compensation.
But if a transaction value cannot be agreed by the owner, the process of eminent domain proceeds in a court of law. This procession is called condemnation. And the private owners will be compensated with fair market value.
Take note that a whole parcel of land is not always needed. A lot of times, only a particular portion of it is required by the authorities.
In this case, the government might not only pay for partial piece of land, but the owners might also be awarded severance damages.
Sometimes the government don’t need land nearby. But what is being built on the land they use cases inconvenience to adjacent and nearby land owners. In this event, these land owners in proximity could start an inverse condemnation demanding that the government acquire their land as well with consequential damages.
For example, your peaceful home could be a dreadful place to live in if an airport is built nearby. Or your health could suffer if there is a power plant in the vicinity.
3) Police power
Police power is the right of the government to enact and enforce laws for the benefit of the public.
On the surface, most of us don’t see much of it applied to real estate. But it is alive and active all the time.
Zoning laws, building codes, fire codes, rent control, safety hazards, tenant rights, etc. They all play a part in police power in areas of real estate.
The funny side to this is that we often feel that it is totally inappropriately enforced when it concerns our property. Yet feel that it’s justified when police power is enforced on real estate belonging to others.
When a property owner dies and leaves no proper documented inheritance plan, the property ownership reverts to the government.
This is the last thing you want to happen to your property.
After paying for it over so many years, at least leave it to a charity organization if you have no heirs.