A question on selling state houses

I have a question in relation to the governments selling of state houses at market prices.

Do you think the government should be able to profit from the sale of land that it continues to have rights over?

In NZ, interests in land are held of the Crown (Veale v Brown (1866) 1 CA 152), with the exception of Māori customary interests (because they don’t owe their existence to a Crown grant).

Land ownership is based on the concept of ‘fee simple’ title which is indefeasible against all adverse claims subject to specified exceptions (Frazer v Walker [1967] 1 AC 569) see also s62 Land Transfer Act 1952. When a fee simple owner dies without heirs or successors, the land escheats back to the Crown. This technically means that while the Certificate of Title grants a bundle of rights (indefeasible title) in respect of the land it does not give absolute ‘ownership’ over the land. This view is reinforced when looking at statutes such as the Public Works Act 1981, which gives the Crown the right to acquire land (s16) through either agreement (s17), or by taking (s23).

In light of the above, isn’t the government selling land, on which state houses are situated, at market rate analogous to me selling you my computer for more than what I paid for it with the presumption that if I ever need it back, I have a right to just take it?

If that is the case, is it even a valid transaction?

I’m not sure about you, but I’m uncomfortable with the government profiting from the sale of land which it (probably) never actually purchased in the first place, and even if it did, it would have been at a much cheaper rate than today’s market rate, even taking into consideration inflation etc.

Note, this is not just a criticism of National’s policy but with governments generally selling land.

Any land law experts able to explain?

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