Eminent Domain

AAA

DEFINITION of 'Eminent Domain'

The power the government has to obtain the property of an individual even without the person's full consent. In most countries, including the U.S., the land owner will be compensated for the land at fair market value. This power allows the government to seize land to be used in public enterprises such as roads, schools, or utilities installations. Eminent domain is generally found in some form in most common law nations.

Also known as "compulsory purchase" (U.K, New Zealand and Ireland), "expropriation" (Canada) and "compulsory acquisition" (Australia).

INVESTOPEDIA EXPLAINS 'Eminent Domain'

In the United States, eminent domain is a right granted under the Fifth Amendment of the Constitution. If real estate property is being seized, fair market value must take into account prices in the surrounding area, and payment must be made promptly. Eminent domain laws are frequently contested in the courts, as there have been cases of property being seized only to have a private business set up shop on the grounds, which goes against the intention of the power.

RELATED TERMS
  1. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  2. Just Compensation

    Compensation provided to an owner whose private real property ...
  3. Condemnation

    The seizure of a property by a public authority for a public ...
  4. Nationalization

    Refers to the process of a government taking control of a company ...
  5. Utility

    1. An economic term referring to the total satisfaction received ...
  6. Privatization

    1. The transfer of ownership of property or businesses from a ...
RELATED FAQS
  1. What kinds of financial instruments are designated as “Securities” by Cabinet Order?

    In Japan, securities are regulated by the Diet and the Financial Services Agency, or FSA. Rulings about securities come down ... Read Full Answer >>
  2. What are the benefits of using ceteris paribus assumptions in economics?

    Most, though not all, economists rely on ceteris paribus conditions to build and test economic models. The reason they do ... Read Full Answer >>
  3. What are some historical examples of debt securitization?

    The first debt securities were probably sovereign debt assets that were transferred from the British government to mercantilist ... Read Full Answer >>
  4. What is Substantial Gainful Activity (SGA) and why is it important?

    Substantial gainful activity (SGA) is what the Social Security Administration (SSA) measures to determine work, income and ... Read Full Answer >>
  5. Which states have the lowest minimum wage?

    As of January, 2015, Georgia and Wyoming have the lowest state minimum wage requirements, according to data from the U.S. ... Read Full Answer >>
  6. What is the difference between the Sarbanes-Oxley Act and the Dodd-Frank Act?

    The Sarbanes-Oxley Act (SOX) was enacted to protect investors from potential fraudulent accounting by companies, whereas ... Read Full Answer >>
Related Articles
  1. Retirement

    Time To Rethink Your Post-Work Needs

    Don't rely on popular wisdom. Get the facts and plan for a comfortable future.
  2. Taxes

    Avoid Capital Gains Tax On Your Home Sale

    If you have property to sell and want to avoid capital gains tax, a Section 1031 exchange may be the answer.
  3. Retirement

    Navigating Government And Nonprofit Financial Statements

    Learn how to trace where your tax dollars and charitable donations are going.
  4. Taxes

    Corporate Tax Rates: The Highs and the Lows

    The United States is No. 2 in the world for its high corporate tax rate. There are ways around paying it, and many nations with lower rates are worse off.
  5. Fundamental Analysis

    Calculating the Herfindahl-Hirschman Index (HHI)

    The Herfindhal-Hirschman Index, (HHI) is a measure of market concentration and competition among market participants.
  6. Investing

    How To Implement A Smart Beta Investing Strategy

    Smart beta investing is the notion of re-writing investment rules to improve investment outcomes by targeting exposures to intuitive ideas or factors.
  7. Professionals

    What the DoL’s Fiduciary Policy Means for Advisors

    After many delays, the DoL's new fiduciary policy is coming. Here's an overview on what financial advisors should expect.
  8. Entrepreneurship

    What's the Verdict on START-UP NY?

    START-UP NY is an initiative designed to attract companies to New York State by giving them 10 years of tax breaks. Sounds good, but is it a success?
  9. Investing

    Market Crisis: Does Diversification Still Work?

    If you still aren’t sold on the benefits of international diversification, you may object that: Diversification didn’t work during the last market crisis.
  10. Investing News

    Germany: Creating Climate For Tech Sector To Grow

    Many German companies, which are eager to catch up with the rest of the world by entering the digital age, are investing in tech startups.

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  3. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  5. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
  6. Risk Premium

    The return in excess of the risk-free rate of return that an investment is expected to yield. An asset's risk premium is ...
Trading Center