Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN) Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN)

Report and recommendations by the panel of experts on the development of policy regarding land ownership by foreigners in South Africa
Pretoria, City of Tshwane
August 2007
Presented to the Minister of Agriculture and Land Affairs, Hon. Lulu Xingwana

Introduction and terms of reference

Since the establishment of democracy in South Africa the Constitution (section 25) allowed for the right to own property and the quest for land reform to stand in a delicately balanced relationship. Ownership of land by non-South African citizens (foreigners) is an intervening factor, and its impact on ownership patterns and land reform is not clearly known to policy-makers. In the first ten years since 1994 the impression emerged that foreigners are increasingly acquiring land in South Africa. The extent of it remained unknown, and therefore informed policy-making remained elusive.

As a consequence of this uncertainty, the Panel of Experts on the Development of Policy Regarding Land Ownership of Foreigners in South Africa (hereafter the Panel) was appointed by the former Minister of Agriculture and Land Affairs, Hon. Ms Thoko Didiza, on 24 August 2004. The Panel was established several months before the National Land Summit held in July 2005, which urged the Government to impose a moratorium on acquisition of land by foreigners in South Africa. On August 14, 2006, the Minister of Agriculture and Land Affairs, Hon. Ms Lulu Xingwana, extended the mandate of the Panel to 15 January 2007 and appointed two new members to the Panel as replacements for two of the original members who requested to step down.

On 17 February 2006 the Panel handed an interim report to Minister Didiza. The report was also released to the public for consideration and further inputs. It received substantial coverage in the media. The Panel received several responses, notably from the diplomatic community in South Africa.

An updated report was presented to Minister Xingwana on 5 December 2006 as a means to brief her on the developments in the Panel’s work.

In view of the uncertainty regarding foreign landownership, and hence its relevance for policy-making, the Minister determined that the Panel’s Terms of Reference (TOR) were to 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 monitoring and 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/foreign practices (laws, policies, impact, etc) on the issue of land ownership by non-citizens.
The Panel interpreted its task on the basis of the TOR to be the following:

The Panel has to provide answers to the questions ‘Who owns South Africa?’ and “How much do they own?’ specifically in relation to non-citizens. Therefore, the first task is to determine the extent and nature of foreign landownership. The Deeds Registries do not keep such information. The Panel’s task was therefore to analyse available but incomplete information to provide a partial indication of the extent and nature of foreign ownership. At the same time, the Panel has to recommend improvements on disclosure of information to improve the national statistics on this type of ownership.

For the purpose of designing an appropriate policy framework, the Panel interpreted the TOR as an instruction to investigate international policies and practices in this regard, and to distill the most appropriate elements from them for consideration in South Africa.

At the same time the Panel understood its task to be an investigation into the impact which the current policy of nonregulation of the property market in respect of foreigners, has had so far on ownership patterns and use of land in South Africa. Taking the public’s view and perceptions into account and weighing them against the arguments of the relevant interest groups, the questions to answer are whether policy intervention and regulation will be appropriate, what should the nature of such intervention be, and what will its possible impact and side-effects be?

Taking all these considerations into account, the Panel understands its TOR as an instruction to integrate all its analyses and conclusions into policy-relevant recommendations.

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