Government-Owned Property: Definition, Example and Property Types

What Is Government-Owned Property?

Government property consists of land or assets owned by federal, state, or local governments and may also include government agencies or government-sponsored organizations such as libraries or parks.

Key Takeaways

  • Government-owned property refers to land or other assets that are legally owned by a government or government entity.
  • Government-owned property may be titled at the federal, state, or local level and may or may not allow unrestricted public access.
  • Some government-owned properties constitute public goods, such as parks, libraries, roads, and sewer and water lines.

Understanding Government-Owned Property

Government-owned property is often considered 'public' property, although that does not mean that all such property is freely accessible to all citizens. For instance, an army base or laboratory may be government-owned, but with highly restricted access. A public playground, on the other hand, may be owned by a local government and free to anybody to enjoy.

Property rights define the theoretical and legal ownership of resources and how they can be used. These resources can be both tangible or intangible and can be owned by individuals, businesses, and governments.

Government property can include residential, commercial, and industrial land, as well as other physical assets, such as machinery. Property may become government-owned property through normal purchases or if it is foreclosed on for failure to pay taxes, or for other reasons. Government-owned property may also refer to the property administered by the federal government, such as consulate buildings and embassies.

Property that is owned by the government is typically exempt from being taxed.

Some government-owned properties are intended for public use and may be funded by taxation. A public good, for instance, is a product that one individual can consume without reducing its availability to others and from which no one is deprived. Examples of public goods include law enforcement, national defense, sewer systems, libraries, and public parks. As those examples reveal, public goods are almost always publicly financed.

Special Considerations

Investors interested in land and other assets can attend an auction of government-owned property, which may ultimately be sold at attractive prices.

For example, the government may seize capital equipment from a manufacturer who declared bankruptcy and owed a substantial amount of taxes. It may auction this off to other manufacturers, who are likely to pay less for the used equipment than they would if they purchased brand-new equipment.

Government-Owned Property vs. Private Property

Government-owned property can be contrasted with private property, which is owned by individuals or corporations. Contemporary notions of private property stem from 18th-century philosopher John Locke's theory of homesteading. In this theory, human beings gain ownership of a natural resource through an act of original cultivation or appropriation. Locke used the expression "mixing of labor."

For example, if a man discovered an unknown island and began to clear the land and build a shelter, he is considered the rightful owner of that land. Since most resources have already been claimed at some point in history, the modern acquisition of property takes place through voluntary trade, inheritance, gifts, a gambling wager, or as collateral on a loan.

Private property rights are one of the pillars of capitalist economies, as well as many legal systems, and moral philosophies. Within a private property rights regime, individuals need the ability to exclude others from the uses and benefits of their property.

All privately owned resources are rivalrous, meaning only a single user may possess the title and legal claim to the property. Private property owners have the exclusive right to use and benefit from the services or product and may exchange the resource on a voluntary basis.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Government owned property tax exemption policy - Lincoln Institute accessed Aug. 17, 2021

  2. Vaughn, K. I. (2012). John Locke: economist and social scientist. University of Chicago Press. P. 51.

Open a New Bank Account
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.