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How can be compensation for devaluation of property determined (Denmark)

Property can devaluate when new public or private facilities are developed in its proximity (roads, railroads, power plants, factories, etc).



What challenges does it focus on?

Establishing a reasonable amount of compensation in case of devaluation of property in Denmark.

Short summary

Radio masts, (rail)roads, airport landing strips, power plants, factories. Many facilities serve the public good. But their proximity can create damages to owners of property. The - expected and realised - nuisance of such facilities often have a negative impact on the value of property. When developing new facilities, governments and companies often compensate a circle of property owners that face such devaluation.

In Denmark, the following compensation scheme for owners near wind turbines was developed:

  1. This scheme is applicable for wind turbines of 25 meters or higher
  2. All losses of value of property will be compensated
  3. If the owner contributed to the loss, the losses are divided proportionate to contribution
  4. The compensation - in all events - is at least 1% of the total value of the property

The 551 compensation payments made show that the average amount was 57,000 kroner per household. This is less than the actual loss of value (which in some cases is up to 20%).

Research evidence

This sharing rule can be found on this website. See also this website. 

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