the Regulation of Ownership of Land in South Africa by Foreigners
[Non-Citizens]
17 February 2006
1. Background
Appointment of the Panel and the terms of reference the land question in
South Africa are central to the actualisation of the core constitutional values
of human dignity, the achievement of equality, the advancement of human rights
and fundamental freedoms, non-racism and non-sexism.
Equitable access to land is a yard stick for measuring the worth of
citizenship and how rights, freedoms and responsibilities are distributed in
the New South Africa. In essence, progress in resolving the land question is an
important barometer for measuring the manner in which South Africa is
consolidating its democratic gains. In other words, reasonable and equitable
resolution of the land question is an essential component in the building and
the sustainability of constitutional democracy in South Africa.
The Panel of Experts on Foreign Ownership of Land (PEFOL) was constituted
and commissioned by the Minister of Agriculture and Land Affairs on 24 August
2004. Despite governmentâs concerted effort to address the land question
through restitution, tenure security, and facilitating access to land through
redistribution and the provision of housing as mandated by sections 25 and 26
of the Constitution, there remains a strong and growing public opinion and
impression that more needs to be done, and be so done at a faster pace. There
is also very strong public opinion and perception, as manifest in the public
hearings convened by the PEFOL, that an unregulated ownership of land and
landed property, such as housing, by foreigners contributes significantly to
the lack of readily available and affordable land for land reform. Given the
history of racially based exclusion of the majority of citizens from land
ownership, development and use under the colonial and apartheid regimes,
unregulated acquisition and disposal of land and landed property without some
priority of access being given to those who were arbitrarily excluded can only
lead to perpetuating the status quo.
It is within this background and context that government considered it
imperative to start a process of developing a comprehensive policy on foreign
ownership of land. The PEFOL was appointed to assist government in
understanding the extent of ownership of land in the country by citizens and
foreigners, the legal and policy landscape, the policies and legislative
framework in selected representative foreign countries on the matter; and to
point to possible policy, regulatory and legal reforms for consideration by the
government.
Accordingly, the panel has considered amongst others the June 2005
recommendations by the Parliamentary Committee on Agriculture and Land Affairs,
the resolutions from the July 2005 National Land Summit and reports of the
study tours to several countries in Asia, America and Europe.
This report has gone a long way in addressing concerns raised during the
public participation process wherein various stakeholders expressed concern
about the absence of empirical evidence supporting the need to regulate foreign
ownership of land in South Africa.
The report incorporates amongst others, concrete data indicative of the
proportion and categories of foreign owned land, including land owned by
individuals and corporate entities, the constitutionality of regulating foreign
land ownership; and the legislation applicable to regulation of land
development and use. The myth that there is abundant unoccupied state owned
land suitable for land redistribution is also clarified.
Finally, the report presents for consideration possible initial immediate
policy measures.
2. Terms of Reference
The panel of experts had to amongst others, investigate, consider and make
recommendations regarding:
* The nature, extent, trends and impact of the acquisition and use of, and
investment in land in South Africa by non-South African citizens;
* The extent to which the current lack of a comprehensive policy and
legislative framework contributes to the acquisition, use and investment in
land by non-South African citizens;
* Whether the Government should (and how) monitor and intervene by policy,
legislative and other means, in preventing any possible negative consequence of
land acquisition/use by non-South African citizens;
* The impact on the property markets on land acquisition and use by non-South
African citizens, distinguishing between land use for residential, commercial,
agriculture, eco-tourism/tourism/game lodge and golf course purposes; and
* Comparative international practices (laws, policies, impact, etc) on the
issue of land ownership by non-citizens.
3. Key Recommendations
Informed by the above, the panel therefore proposes immediate initial
measures to assist government in regulating the registration records in respect
of foreign ownership of land. The measures are designed to facilitate ongoing
investigations into the impact of foreign land ownership on land use and prices
and consequently on the prospects for meaningful land reform in South
Africa.
The initial measures recommended include:
1. Reporting requirements for certain transactions on land and landed
property. Natural and juristic persons to make declarations on, for example,
transfer duty and deeds registration forms with regards to gender, citizenship,
nationality, identification number, passport number, company registration
number, income tax registration number, VAT registration number, trust
registration number, category of shareholders and beneficiaries, as may be
appropriate to the category of the legal personality. Race disclosure might
apply only to South Africans and permanent residents for purposes of measuring
transformation in the South African land holding patterns.
2. Ministerial approval for certain transactions on land and landed property
in the interest of non-citizens and non-residents. Agricultural land in excess
of certain prescribed value and/or size; land earmarked for restitution or
redistribution; protected areas such as coastal land, water catchments,
military installations and land along the international territorial boundaries
of the Republic of South Africa; and land used for golf estates, golf courses
and game farming.
3. Intergovernmental review and oversight committee. It is recommended that
a permanent inter-departmental and intergovernmental review and oversight
committee to oversee the implementation of the regulations with regards to
ownership and use of land by foreigners and non-residents be established.
4. Rationalisation and harmonisation of zoning and change of land use
approval procedures. It is recommended that the government undertakes a review
of development approvals and current procedures and practices in the zoning and
re-zoning of land for land use purposes and to institute capacity building in
this regard, especially at the local government level.
5. Moratorium on Sale of Land to Foreigners The panel recommends that a
moratorium on the purchase and sale of South African land to non citizens be
imposed with immediate effect, as an interim measure until appropriate
legislation has been promulgated
4. Way forward
There are a number of outstanding issues that the panel would still want to
consider. These includes amongst others,
* Updating data on corrections to âdefective recordsâ and determination of
foreign interests in corporate entities owning or with interest in land;
Enquiries: Prof Shadrack Ghutto
Cell: 082 931 1683
Issued by: Department of Land Affairs
17 February 2006
Source: Department of Land Affairs (http://www.land.pwv.gov.za)
