As with increasing awareness of environmental problems, the government in Taiwan established a new land-use scheme in National Comprehensive Development Plan to prevent the resource depletion and environmental disasters resulting from improper land-use activities. In the land-use scheme the land resources are identified as ‘developable areas’ and ‘restricted areas’ according to their importance and fragility. The restricted areas are imposed strict land-use regulations for the purposes of resources conservation and preservation. However, this may invade the property rights so significant that compensation is required. Thus, this research worked on two issues—one is whether the invaded land property rights should be compensated, and the other is how to compensate is justified. This research starts with discussing the value of environment resources, including quantifiable (priced and un-priced) and un-quantifiable value, to justify the restricted areas for environmental protection. Secondly, by reviewing the literature on the theory of property rights and the examples of taking in USA, this research developed a conceptual framework for determining whether the invaded land property rights should be compensated, and for suggesting how to compensate if the compensation is required. Finally, this research applied the framework to the Taipei Water Preservation Area to discuss whether the land property rights invaded by the regulations should be compensated and what kind of compensation would be appropriated.