Rural Development and Land Reform Minister Gugile Nkwinti. Photo: Leon Nicholas.

Cape Town - South Africa plans a radical shake-up of its land policy to limit foreign ownership and could submit legislation to parliament by December, a government minister said on Wednesday.

The proposal is part of a reform package sponsored by the ruling African National Congress (ANC) that includes the expropriation of land deemed to have been illegally acquired, a suggestion that could spook foreign investors.

“The principle is that foreign nationals should not own land in the country but should have a long lease at a minimum of 30 years,” land and rural development Minister Gugile Nkwinti told reporters.

Nkwinti said the government was wary of applying the proposals retroactively, however, on concerns that the constitutionality of the bill could be challenged in court.

Real estate industry representatives spoke out against the proposal, saying overall foreign investment in South African property was small.

“This is completely ill-conceived,” said Andrew Golding, chief executive of Pam Golding Properties. “Particularly when there is a misconception that foreigners are pouring into South Africa and pushing prices up.”

Land reform remains a sensitive issue in South Africa, where 20 years after the end of apartheid the white minority still holds around 87 percent of commercial farm land.

A government-appointed panel in 2007 said foreign nationals owned 3 percent of land used for residential housing, farms and sectional titles, with a significantly higher percentage in coastal and game farming areas.

The exact size and value of land owned by foreigners was unclear. Nkwinti said on Wednesday that foreigners are thought to own between 5 to 7 percent of South African land.

Under its existing land reform programme, the ANC had aimed to transfer a third of all farmland to blacks by 2014.

The government has said it would not meet the deadline because it did not have the tens of billions of dollars needed to transfer large swathes of land to the black majority.

The state also plans to change the “willing-buyer willing-seller” scheme it has used to purchase land, citing the difficulty in price negotiations.

Nkwinti said the government also wanted an expropriation act to confiscate land without compensation if the land was acquired illegally or used for illegal purposes. - Reuters