South Africa proposes bill to ban land ownership by foreigners

IF the proposed bill eventually becomes law, foreigners living in South Africa will henceforth lose the right to own landed property in the country.

  This come to fore last week during the country’s president State of the Nation Address (SONA) to Parliament, when Jacob Zuma said foreign nationals will be barred from owning land in the country, but they will be allowed to enter into long-term lease contracts.

“In this regard, the Regulation of Land Holdings Bill will be submitted to Parliament this year,” he said to applause in the National Assembly.

The ruling African National Congress (ANC) had long been suggesting to end foreign ownership of agricultural land due to concerns the country is losing control of its own food security.

Land had become a critical factor in achieving redress for the wrongs of the past.

The second window for lodging land claims was reopened last year.

Zuma said more then 36,000 land claims had been lodged nationally. The cut-off date was 2019.

“We are also exploring the 50/50 policy framework, which proposes relative rights for people who live and work on farm adding that “Fifty farming enterprises will be identified as a pilot project.”

In terms of new proposed laws, a ceiling of land ownership would be set at a maximum of 12,000 hectares.

Through the land reform program, more than 90,000 hectares had been allocated to smallholder, farm dwellers and tenants.

“The process of establishing the office of the value -general is underway, which is established in terms of the Property Valuation Act,

“Once implemented the law will stop the reliance on the willing-buyer, willing-seller method in respect of land acquisition by the state.” Zuma said

 However, in swift reaction, South Africa Property Owners (SAPOA) strongly denounce ban of Foreign Land Ownership Bill.

According to SAPOA CEO Neil Gopal, President Jacob Zuma’s statement raises concern about the possible impact on foreign land ownership of property companies, game farms as well as foreign investments in hotels in South Africa. 

Johannesburg — The proposal ban of foreign nationals from owning land in South Africa announced by President Zuma last week, has placed in doubt and disappointed the South African Property Owners Association (SAPOA).

According to SAPOA, the President’s statement raises concern about the possible impact on foreign land ownership of property companies, game farms as well as foreign investments in hotels in South Africa.

  The government has been publicly discussing the policy for over two years but it is back in the spotlight after President Zuma announced in last week’s State of the Nation Address that Foreigners will not be allowed to own land in South Africa.

“Regulation of Land Holdings Bill will be submitted to Parliament this year,” Zuma said.

Under the proposed Bill, “foreign nationals and juristic persons […] as well as juristic persons whose dominant shareholder or controller is a foreign controlled enterprise, entity or interest” will be prohibited from owning land and instead only eligible to lease land for periods of between 30 to 50 years. 

The ban is aimed at farm or agricultural land not residential property.

In addition, the Bill sets a ceiling of land ownership that restricts the amount of land that any individual — regardless of nationality — can own to 12,000 hectares.

Should an individual own land in excess of that amount, the government will purchase and redistribute the land.

 “The implementation of such a policy would reduce foreign investor confidence in South Africa, affecting the economy as a whole,” highlights Neil Gopal, Chief Executive Officer of SAPOA.

 “The issue of land reform proposals in South Africa is nothing new,” says Gopal. “As the issue escalates, it has the potential to hamper investor confidence in the country and curb foreign direct investment flows. Foreign investment in property boasts benefits for the commercial property industry, and with such proposals put forward, the industry falls prey to negative knock-on effects,” adds Gopal.

 SAPOA feels that the change in policy is not justified.