Limiting foreign ownership of land in South Africa

14 February 2015

President Jacob Zuma announced the Land Holdings Bill, a new proposed law that will prohibit foreign ownership of land in the country, in the State of the Nation Address on Thursday, 12 February 2015.

Once the Bill is assented to by the President, foreign nationals can only be entitled to long term leasing of land with a minimum of 30 years and will not be allowed to buy land in South Africa.

The Bill will also regulate the amount of land that any individual can own, the limit being 12000 (twelve thousand) hectares- an approximate equivalent of two farms. If any single individual owns above that limit, the government would buy the excess land and redistribute it. The Bill will soon be sent to Cabinet for approval, after which will be a process of public consultation and thereafter it will be submitted for the necessary Parliamentary procedures before being assented to by the President.

The practice of limiting land ownership by foreign nationals and juristic persons is an established practice internationally.

According to the proposed policy:

1. Foreign nationals and juristic persons are understood as non-citizens as well as juristic persons whose dominant share holder or controller is a foreign controlled enterprise, entity or interest. Hence not all immigrants to South Africa will be excluded from land ownership;

2. This category of foreign nationals that are non-citizens will not be able to own land in freehold from the time the policy is passed into law; they will be allowed a long term lease of 30 to 50 years. 

3. It is recognised that this cannot apply retrospectively without constitutional infringements and as such those who have already acquired freehold would not have their tenure changed by the passing of the proposed law (the Regulation of Land Holdings Bill).

However, in such instances the Right of First Refusal will apply in favour of another South African citizen in freehold or the state if the land is deemed strategic.

4. Furthermore, environmentally and security sensitive lands as well as those that are of historic and have cultural significance, and strategic lands (for land reform and socio-economic development) will be classified by law and land ownership by foreign nationals (non-citizens) in these areas will be discouraged.

5. The policy will be affected through a call for compulsory land holdings disclosures[1]. These disclosures will be in terms of race, nationality, gender, extent of land owned and its use. The process will be managed through a Land Commission[2] established, amongst others, to call for these disclosures, collect and assess the information and maintain it in collaboration with the national deeds registry.

The problems that this policy seeks to address include:

1. The need to secure our limited land for food security and address the land injustice of more than 300 years of colonialism and apartheid.

45% of population (23 million South Africans) live on or below the poverty. 58% of this poverty stricken people are in rural areas[3]; Access to a land allotment for households and rural entrepreneurs' and enterprises has shown to go a long way in addressing equity and poverty (two parts of our triple challenges).

2. Furthermore, in many instances high value agricultural land has had its use changed to luxury and leisure uses and environmentally sensitive lands have also been inappropriately developed;

3. In some parts of the country escalations in prices have been experienced which have made land in these areas inaccessible to citizens;

4. The proposed policy makes provisions for exemptions to access lands in classified areas based on certain conditions, primarily developmental.

Statement issued by Mac Maharaj, The Presidency, February 14 2015

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