Finance ministry revises land compensation rates

The finance ministry has revised compensation rates for land, structures, cash crops and fruit trees when acquired by the government.

The finance ministry’s notification issued on April 21, to the cabinet secretariat, National Land Commission and government agencies states that the compensation rates for land, both in rural and in urban areas, are revised.

“The rates and guidelines shall supersede all the earlier relevant rates and rules,” the finance ministry’s notice says. “These shall come into force with immediate effect and prevail for a duration of three years.”

The revision is as per Section 151, Chapter 7 of the Land Act of Bhutan 2007 and as per the decision of the special Lhengye Zhungtshog’s 23rd session held on April 14 and 15 this year.

While applying the rates for rural land compensation, additional factors like distance from the highway or feeder road; water availability on land; topography of land; soil in-stability; and scenic, cultural and historical value have to be taken into account.

According to the Compensation Rates (CR) – 2017, the compensation rate shall be increase by 10 percent if the location of the land under assessment is within half an hour (normal route) by normal walking distance from the nearest highway or feeder road.

If the location of the land under assessment is more than half an hour but less or equal to one hour normal walking distance from the nearest high way or feeder road, the rate will be increased by 5 percent.

If the land is more than an hour normal walking distance, then there will be no increase in the compensation rate.

There will be 5 percent reduction in the compensation rate if there is no water in the land under assessment at the time of the assessment.

When it comes to topography of the land, the compensation rate shall remain same if the topography is less than 45 degree. The rate will be decreased by 10 percent if the topography of the land under assessment is more than or equal to 45 degree.

There will be 10 percent decrease if the land under valuation is unstable, marshy and is prone to landslides. The rate will remain same should the soil be stable.

Compensation rate will be increased by 5 percent should the land under valuation have scenic cultural and historical significance.

Similarly, factors like road connection, soil in-stability and access to water will be taken into account when calculating the urban land compensation rates.

The compensation rates shall be decreased by 5 percent each if road connection is not available and if there is no access to water. There will be 10 percent decrease in the compensation rate if the soil is un-stable and prone to landslides, among others.

The compensation for buildings or structures shall be based on its current construction cost, which is the cost of constructing a similar structure at the current prices. This should amount to the replacement cost with no depreciations being applied, as done from 2009.

On the decision of the agency or project to acquire land, the proposal has to be submitted to the National Land Commission Secretariat (NLCS) for formal approval. The NLCS will convey its decision within two weeks.

The next implementation procedural step is to notify the landowner. Subject to the approval of the NLCS, the Dzongkhag or Thromde Committee is to notify the landowner of the government’s intention to acquire land at least 120 days prior to the acquisition of the land.

Should the landowner opt for a substitute land, the case shall be dealt with as per the Land Act of Bhutan 2007. Should the landowner opt for monetary compensation, the Dzongkhag or Thromde committee will determine the compensation amount as per the compensation rates fixed by the government.

For distances from the municipal boundary, the boundary demarcated by the works and human settlement ministry shall remain valid.

The compensation for land shall also be worked out by the committee based on the rates while the compensation for the structures shall be based on the estimates prepared by ‘qualified dzongkhag engineers’ vetted by the committee.

Taking possession of the land shall be as specified in Section 158 of the Land Act of Bhutan 2007.

The compensation rate applicable shall be as per the category of land as on the date of notification of the government’s intention to acquire land.

The details of the compensation rates are available at www.mof.gov.bt.

Dechen Tshomo

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