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New bill to set bar on foreign land ownership high

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Land Reform and Rural Development Minister Gugile Nkwinti

 

Johannesburg - Rural Development and Land Reform Minister Gugile Nkwinti will introduce new legislation prohibiting foreigners from owning land in South Africa and limiting land sizes for all other owners in the country before the end of the year.

The Acquisition and Disposal of Land by Foreign Persons Bill will be presented before Parliament’s business ends this year, according to Nkwinti’s spokesman Mtobeli Mxotwa.

But first the new law will be sent to cabinet and after its approval there will be extensive public consultation before heading to Parliament.

Ownership of vast tracts of land will also be regulated.

“People will not be able to own as much land as they want,” Mxotwa said.

Mxotwa insisted that the bill and government’s policy on land ownership by foreign nationals, which also awaits cabinet approval, will definitely be finalised before the end of the year.

Among other objectives of the bill and policy include:

*Regulating land ownership by foreign nationals and business entities.

*Ensuing priority access to land by South African citizens.

*Promoting long-term leases for foreign nationals.

*Placing limits on land sizes to foreign nationals.

*Making more land available for land reform.

*Promoting policy certainty and consequently create an enabling policy environment for international investment.

Mxotwa told The Sunday Independent that only South Africa does not regulate foreign land ownership.

In Australia, there are plans to lower the threshold from $231 million (over R2.3 billion) to 5 hectares, which is in line with New Zealand’s legislation.

This will mean that foreign nationals planning to acquire more than 5ha of Australian agricultural land will need to apply for permission.

Foreign nationals in Korea are required to report the acquisition of domestic land within two months of concluding the sale.

Last year, Russia published a draft law to bar foreigners from owning or renting land in that country without official permission.

At its Mangaung national conference in December 2012, the ANC resolved there would be no ownership of land by foreign nationals “as a principle” and undertook to convert current ownership into long-term leases after government’s land audit is finalised.

But according to Mxotwa, foreign nationals who already own land in South Africa would not face expropriation.

“This will address land disparities between communities in South Africa because indigenous people have no land,” he said.

Mxotwa said stringent measures were needed to control access to land by foreigners. The bill and policy on foreign land ownership would complement government’s radical redistributive model for land reform – the policy on strengthening the relative rights of people working the land, which aims to deracialise the rural economy and democratise allocation and use of land, among others.

The model will see farmers sharing their land with their workers depending on the length of their service from 10 to 50 years.

Another portion will be made available for household subsistence by all farmworkers including those with less than 10 years’ service.

In 2004, former president Thabo Mbeki’s government appointed a 10-member panel of experts on foreign ownership of land chaired by Professor Shadrack Gutto, and including late former deputy minister Joe Matthews, Prof Fred Hendricks, Bonile Jack, Prof Dirk Kotzé, Mandla Mabuza, Nothemba Mlonzi, Mandisa Monakali, Cecil Morden and Christine Qunta.

After completing its investigation in 2007, Gutto’s panel recommended a two-year temporary moratorium on the sale of state land to foreign nationals and South Africans who do not qualify for redress in terms of land reform policies and legislation.

The panel also recommended that foreign nationals seek special ministerial approval for sale of land that would negatively impact government’s constitutional obligation to effect land reform and provide access to adequate housing.

Gutto’s panel had also suggested medium- and long-term leases of public land for future acquisition of land by foreigners because leaseholds may be less controversial than full ownership. The panel also said foreign land ownership should be prohibited around national keypoints, sensitive coastal and conservation areas, close to military installations and along borders and international boundaries.

According to the panel’s report, fronting could also undermine regulation of foreign land ownership and that asset forfeiture could be a sanction to fight fronting.

Last week, property company Sotheby’s International Realty revealed that foreign buyers purchased almost R6.5bn worth of property in the country last year.

First National Bank recently reported that foreign home buyers from countries such as Cameroon, Nigeria, Zimbabwe, Angola and Mozambique had risen from 16 percent in the third quarter last year to 19.5 percent in the first quarter of this year.

Foreign buyers contributed 2 565 sales worth R2.8bn while in Cape Town there were 1 497 sales worth R2.3bn. Properties worth about R800 million in KwaZulu-Natal last year were bought by foreigners while they were also responsible for about 260 properties worth about R230m in the Eastern Cape.

Chairman of Sotheby’s International Realty in SA, Lew Geffen, said foreign interest increased over the past six months despite the mining strikes that have badly affected the economy.

loyiso.sidimba@inl.co.za

Sunday Independent


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