Real Estate Investor Magazine South Africa May 2013 | Page 58

SOUTH AFRICA

BY RUI MARTO

Land Ownership
Under Fire
Should foreign property owners
be worried?

L

ast mont h t he M in ister of Ru ra l
Development and Land Reform, Gugile
Nkwinti, announced that foreign nationals
will no longer be able to own land in South
Africa once the Government’s new Land Policy
is finalised and promulgated into law. The news
has sent shockwaves amongst foreign nationals
who already own property in South Africa,
foreign investors and the property industry. These
were not the only restrictions announced by the
Minister which are sought to be introduced. In
this article, I examine what these proposed Land
Reforms will be and more specifically, the extent
to which they will affect the foreign nationals’
ownership of property in South Africa.

Context
The question of Land Reform in South Africa has
always been a highly emotive and complex matter.
The key challenge facing South Africa is how to
reverse the racial inequalities in land ownership,
resulting from this country’s past and the violent
dispossession of indigenous people of their land.
The land reforms need to be examined in this
context. The restrictions of land ownership by
foreigners are part of these reforms.
The debate around the ownership of land by
foreigners has arisen since 1994. With democracy
came opportunit y, a worldwide interest,
investment and an increase in the acquisition of
land in South Africa by foreigners. There seems
to be a specific concern around the perceived or
actual ownership by foreigners of coastal and
inland prime tourism land, game reserve land, as
well as, farmland. Those advocating restrictions
on foreign land ownership argued that:56

May 2013 SA Real Estate Investor

1. Foreigners were acquiring propert y
that was either sensitive or considered
important from a nationa l securit y
perspective, including communal land,
prime tourism and game reserve land or
sites that are significant for heritage, rural,
strategic and/or environmental reasons;
2. T he re w a s a c on s e q uent i nc re a s e
in propert y prices, resulting in the
perception that South Africans could not
afford to own property in certain areas;
3. The foreigners were producing food in
South Africa solely for exports abroad.
This question was further explored as
part of the Land Summit in July 2005.
Consequently a Panel of Experts was set
up to guide the process of Land Reform.
One of the main questions requested
which the Panel had to answer was: “Who
owns South Africa?” The Panel made
various recommendations, including:1. The disclosure of nationa lit y, race,
gender and other information by current
property owners. The Deeds Registries
could not provide accurate information
in this regard;
2. That similar declarations be made by
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