Compulsory Acquisitions in Tasmania: Insights from the Society’s 28 August 2025 Seminar

The Law Society of Tasmania recently hosted a seminar on the compulsory acquisition of land, bringing together a panel of experts to unpack the legal framework, valuation principles, and practical realities of this complex area. The session featured contributions from Clare Wootton, Senior Associate, Simmons Wolfhagen, private valuer and Regional Manager of Acumentis, Joe Stansfield, and Head Valuer at the Office of the Valuer-General (OVG), Aiden Cameron-Smith, joined by OVG Acquisition Program Manager, Elana Salter. Together they provided a structured overview of the acquisition process, compensation entitlements, and the trends emerging from recent projects across Tasmania.

The Legislative Framework
Compulsory acquisition in Tasmania is governed primarily by the Land Acquisition Act. The starting point in every matter is identifying whether there is a proper statutory power to acquire.

• Section 4 empowers the Crown to acquire land for authorised public works.
• Section 5 provides for other acquiring authorities—such as TasWater and TasNetworks—subject to their own enabling Acts.
• Local councils can acquire land under the Local Government Act, with “prescribed purposes” defined in regulations.

Importantly, Aboriginal land is excluded from compulsory acquisition powers.

The panel stressed that the Act is not simply an enforcement tool. It is intended to protect landholders by ensuring they are no worse off, while also providing certainty for acquiring authorities.

The Acquisition Process
The formal process usually begins with a Notice to Treat, which is served on the owner of the land. This notice outlines the property interests affected and provides owners with rights to engage lawyers and valuers at the authority’s expense (provided those costs incurred are reasonable).

If negotiations do not lead to agreement, a Notice of Acquisition is signed by the Acquiring Authority and published in the Gazette. At that moment, ownership vests in the Acquiring Authority and the owner’s rights convert to a claim for compensation.

Two alternative pathways were highlighted:

• Section 9 agreements, which proceed like a conventional sale and transfer.
• Section 16 agreements, where the owner consents to the taking and land vests via Gazette notice, free of mortgages and encumbrances. This option is often more streamlined for all parties.

Compensation Principles
The basis for compensation is set out in section 27 of the Act. The panel worked through the key heads of claim:

• Market value – assessed at the date of the Notice to Treat, usually on a before-and-after basis.
• Special value – rare, requiring proof of unique qualities not replaceable elsewhere.
• Severance – loss caused where land is divided, for example by a highway.
• Injurious affection – diminished value of retained land due to the impact of the works.
• Betterment – uplift in value of retained land from the project (rare; e.g. flood levees protecting land).
• Disturbance – proven financial loss (such as cleaning costs, business interruption, or relocation expenses).

The panel emphasised that disturbance requires documentation and evidence. Receipts and records of costs are crucial for claims.

Valuation and Timing
Valuations must be made as at the date of the Notice to Treat – even if the claim is resolved years later. Statutory interest applies from the date of gazettal until payment.

This can create friction where markets have moved significantly in the interim. Owners often need to be educated that later sales evidence may not be directly relevant. Limited use can be made of sales shortly after the notice date, provided the market was stable.

The principle of highest and best use applies: while zoning is relevant, broader market perception of future development potential may attract a premium.

Statistics and Trends
Data shared at the seminar gives a clear picture of the scale and value of acquisitions in Tasmania in recent years:

• Around 280 acquisitions/offers over the past four years.
• 50% of compensation payments were under $10,000.
• 40% between $10,000–$100,000.
• 9% between $100,000–$1 million.
• Only 1% exceeded $1 million.

Most acquisitions were undertaken by State Growth for road projects, with smaller numbers by Health, Education and other agencies.

The majority of acquisitions are resolved by negotiation rather than litigation. The costs, stress and risks of court proceedings mean few owners elect to fight claims through the courts.

Accommodation Works
A unique feature of State Growth acquisitions is the Notice of Accommodation Works, which specifies mitigation measures such as fencing, drainage or tree planting.

The panel urged practitioners to ensure these works are clearly documented and, where possible, completed before settlement to avoid disputes. This provides a “source of truth” for both parties and helps prevent later arguments about quality or scope.

Costs and Payments
The Act allows owners to recover legal and valuation fees, provided they are reasonable and incurred as a consequence of the acquisition.

• The Office of the Valuer-General (OVG) will often pay valuers directly.
• Authorities may approve additional expert costs (e.g. planning, noise reports), but consent should be obtained in advance.
• Owners may also request advance payments of up to 90% of an offer, useful where disputes are likely to delay resolution.

The panel noted that owners should not be out-of-pocket for reasonable representation, reinforcing the protective intent of the Act.

Other Authorities
When acquisitions are undertaken by non-Crown entities (e.g. irrigation schemes, utilities), the Act still applies but the OVG does not oversee the process.

Owners should be aware that statutory protections may not apply to by-agreement acquisitions. For example, reimbursement of legal costs or entitlement to statutory interest may not be offered, and these become matters for commercial negotiation.

Resale and Disposal
If land acquired is not required for the intended purpose, the Act requires it to be offered back to the previous owner within seven years at a price either agreed, or determined in the manner applicable to disputed claims under the Act.

This provision prevents authorities from “flipping” land to developers and reinforces the principle that compulsory acquisition is for genuine public purposes.

Tax Considerations
Compulsory vesting by Gazette is generally not a supply for GST purposes, meaning GST is not applied.
However, agreements under s 9 may create GST implications, and capital gains tax can apply depending on the nature of the property.

Conclusion
The seminar highlighted both the technical and human aspects of compulsory acquisition. While the legislation provides clear protections for landowners, the process is often stressful and contentious.

Key takeaways included the importance of:

• Early legal and valuation advice.
• Documenting disturbance losses.
• Ensuring accommodation works are recorded and delivered.
• Educating clients about timing, valuation dates and realistic expectations.

As Tasmania faces significant infrastructure development over the coming years, compulsory acquisitions will remain a live and challenging issue. The seminar offered valuable guidance to practitioners, reaffirming the protective intent of the Land Acquisition Act and the need for collaborative, well-informed practice.

If you would like to view the seminar, Compulsory Acquisition in Practice: Frameworks and Challenges, the recording will soon be available in the Society’s Online Recording Store.

August 2025

Clare Wootton, Senior Associate, Simmons Wolfhagen
Joe Stansfield, Private Valuer and Regional Manager, Acumentis
Aidan Cameron-Smith, Head Valuer, Office of the Valuer-General
Elana Salter, Acquisition Program Manager, Office of the Valuer-General