Overview:
A proposed Senate bill would establish a $50-per-square-meter minimum value for land in Palau and create uniform appraisal procedures. Supporters say the measure could help protect landowners during negotiations, while senators questioned whether a single minimum price can reflect the wide differences in location, access and land value across the country.
By: Eoghan Olkeriil Ngirudelsang
NGERULMUD, Palau — “Many times, investors who negotiate with Palauans to lease their lands understand real estate and land values at their market prices while the Palauan owners do not,” Sen. Tellames said, as the Senate considers legislation that would establish uniform land valuation and appraisal procedures nationwide.
Five senators — Tellames, Melairei, Remengesau, Tabelual and Sungino — introduced the bill Thursday seeking to establish a minimum land price of $50 per square meter for all land in Palau, whether publicly or privately owned.
If enacted, the requirement would apply to land sold to Palauan nationals as well as land leased to foreigners.
Tellames, the bill’s main introducer, said the proposal is intended to address an imbalance in land negotiations, particularly when landowners may not have access to current market information or professional appraisal services.
“Meaning they enter into land negotiations at a weaker standpoint with no assistance,” Tellames said. “This bill aims to even out that imbalance.”
The bill states that “many landowners, particularly customary landowners and families unfamiliar with prevailing land values or complex real estate transactions, have entered into long-term lease agreements without independent appraisal or knowledge of the true market value of their property.”
Under the proposal, the Bureau of Land and Survey would oversee the appraisal process and maintain appraisal records.
The bureau also would issue land appraisal certificates upon request. The certificates would identify the size of the property in square meters and its corresponding appraised value based on established rates.
During deliberations, however, senators raised questions about whether a single minimum value would adequately reflect differences in land location, access and development potential.
Sen. Whipps noted that land values can vary significantly depending on location and access to infrastructure.
“A land in Koror with access to the main road and connectivity to electricity, communications and water supply might be valued far more than a land in Babeldaob,” Whipps said.
He also described a scenario involving landlocked property deep in the forest of Ngatpang, without access to roads, electricity, water or communications. Such property might be sold to another Palauan landowner who owns adjoining land, he said, but the transaction might not justify the $50-per-square-meter minimum proposed by the bill.
Whipps urged senators to “let the free market decide the price of land,” while supporting efforts to educate Palauans involved in land sales.
Sen. Kuartei proposed another approach, suggesting that lawmakers consider having the Palau National Development Bank establish a department to provide land appraisal services to Palauans at a lower cost.
Kuartei said such a service could help people who cannot afford the fees charged by private land appraisers.
The bill passed its first reading and was referred to the Senate Committee on Judiciary and Governmental Affairs for further consideration.