Real Estate Investor October 2020 October/November 2020 - Page 32

LAND REFORM
Van Staden believes that the main purpose of section 25 of the constitution is to protect the rights of property owners in the country , he says the government should make sure that South Africa is a property rights protecting and respecting state . He does allude though to the fact that ‘ not all expropriation without compensation undermines property rights .
According to van Staden , these are instances where land can be expropriated without compensation :
Abandoned land - it ’ s not a foreign thing , it does happen it has been seen in high crime areas in Johannesburg to an extent that
Where land has been dispossessed by the apartheid regime – The land may have been shared among the regime ’ s friends and political partner , and in this instance , land can be expropriated without compensation .
The current status quo
It is also important that we take note of the good deed by our government where necessary . As part of its contribution to the government ’ s land reform programme , so far , the Agriculture , Land Reform and Rural Development government department announced that the government will issue advertisement notices of 896 farms measuring 700 0000 hectares of underutilised or vacant State land in the following provinces
• Eastern Cape = 43000 Ha
• Free State = 8333 Ha
• KwaZulu-Natal = 3684 Ha
• Limpopo = 121 567 Ha
• Mpumalanga = 40 206 Ha
• Northern Cape = 12 224 Ha
• North West = 300 000 Ha
Here , the government offers a 30-year leasehold , with an option to buy the farm . This form of leasehold places certain obligations to the State as the lessor and beneficiaries as the lessees .
According to the presidency , this is a steer towards the right direction in addressing the land reform question . But civil land and economic developmentbased organisations are on the contrary . Many believe that the government is not putting enough effort on the reformation of land in South Africa .
The free market foundation , for one , says the government is failing to grasp an opportunity to redistribute state owned land to landless black citizens on full freehold title . “ Instead , it is ‘ allowing ’ them to farm state land on a 30-year lease and only then , will an option to buy kick in . This perpetuates apartheid thinking that poor black people may not own land .”
The president of the foundation , Leon Louw expressed the standpoint of the foundation regarding the leasing of farm to people of South Africa .
“ The 896 farms are a move in the right direction , but why not full title ? Why is government holding onto to ownership ? Full title deeds are the first step on the economic prosperity ladder . A title deed is property security and enables the owner to become an economically active citizen by accessing finance and other forms of benefits that home ownership provides . Benefits include pride , dignity and the ability to pass property to the next generation and other family members , something that has long been denied to poor black people ,” He said .
The Economic Flipside
One of the most important factors to be considered by either internal or international investors prior to deciding on investing , is whether or not they are going to benefit from their investments . The question they normally ask is ‘ are we able to leave with our benefits out of this country ’? and while conversations about expropriation without compensation are necessary yet wilding , they do affect the investor pulling effect of the country quite badly . This is due to the uncertainty around land ownership which is interpreted as weakening the strength of property rights in South Africa .
Free Market Foundation Director , Themba Nolutshungu , believes that the expropriation of land without compensation will continue to threaten investor confidence in South Africa .
“ If anyone or government wants to destroy an economy in South Africa , they should implement the expropriation of property / land without compensation . That way you will be precipitating capital flights .”
“ Investors want clarity , guarantee , legal certainty and surety that their properties will not be expropriated . Land expropriation without compensation is a dangerous thing to contemplate in South Africa at this point .”
Nolutshungu believes that this will be a disastrous move , not only for the property sector but for the entire economy of the country . What do you think ?
SOURCE Business Leadership South Africa , Free Market Foundation
SA Real Estate Investor Magazine OCTOBER / NOVEMBER 2020 11
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