Land is a critical factor for achieving redress for the wrongs of the past

President Jacob Zuma announced the Land Holdings Bill, which will soon be tabled in Parliament, during his State of the Nation Address on Tuesday, 12 February 2015. The Bill prohibits outright foreign ownership of agricultural land and instead confines foreign nationals to long-term leases of between 30 – 50 years.

The Bill does not only apply to foreigners, it also regulates the amount of land that an individual South African is entitled to own, restricting it to 12 000 hectares. If an individual owns land exceeding that limit, the government will buy the surplus land and redistribute it.

Foreign nationals (persons not regarded as South African citizens) or foreign entities (where the dominant shareholder or controller is a foreign controlled entity, enterprise or interest) will not be entitled to acquire land in freehold format once the Bill becomes law. In order to stay clear of constitutional infringement, the restriction will not apply retrospectively and as such the passing of the proposed law will not modify the tenure of foreign nationals that already own land in freehold. It is however important to note that there may be a right of first refusal applicable in favour of another South African citizen, or the State, if the foreign-owned land is subsequently put on the market and is considered to be strategic.

The Bill also envisages that land will be classified, and foreign nationals will be discouraged from owning land that has been classified as sensitive from an environmental or security perspective, as well as land that is of cultural, historical or strategic significance.

Compulsory land holdings disclosures will have to be made pertaining to the race, gender and nationality of the owner, as well as the extent of the land owned and the use thereof. A Land Commission will be established to manage this process and be responsible for corresponding with the National Deeds Registry in order to keep the records up to date.

Due to a lack of further information available, much uncertainty exists with regards to various aspects of the proposed law, such as whether or not:

  • South Africans who marry foreign nationals will be able to purchase property together in undivided half shares;
  • the restriction applies to sectional titles and share-block;
  • the State will buy the land that exceeds the allowable limit at market related prices or simply expropriate it;
  • the compulsory disclosures pertaining to the race, gender and nationality of an owner will pass the constitutionality test.

The Bill will soon, according to government spokespersons, be sent to Cabinet for approval, after which a process of public consultation will follow. Thereafter it will be submitted for the necessary Parliamentary procedures before being sent to President Zuma for his approval.

When the Bill is made available for public comment, we will report further on these aspects.

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