South Africa February 2006 |
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| Foreign land ownership, (Financial Mail, 2006-02-24):-The panel investigating the impact that foreign buyers have on property prices in SA has apparently revised its stand on a blanket freeze on all land transactions by noncitizens until laws regulating these transfers are passed. Last week the panel presented its first progress report to land affairs & agriculture minister Thoko Didiza. Panellist Christine Qunta said at a press conference on Friday that the panel had recommended a moratorium on "all purchase and sale [of property] by foreigners". The measure would prevent panic buying while government worked on regulations, and would cut across residential, agricultural, industrial and commercial properties. This caused consternation among local economists and estate agents, fearing a freeze could last for years until parliament passed relevant legislation, and in the interim damage SA's image. International reaction was muted. But this week panel chairman Shadrack Gutto, who returned to SA at the weekend, said the recommendation was "more nuanced" and a moratorium should apply only to certain regions or categories of land. These could include areas where a high density of foreign ownership co-incided with high land prices, such as the northern KwaZulu Natal seaboard and the Cape peninsula, or high-yield agricultural land above a certain value. The panel also wants the freeze to apply to any land earmarked for land reform. "If cabinet approves the moratorium, further work will be needed to refine this recommendation," he says. Gutto says that, to limit market uncertainty, new ownership rules could apply retroactively from the date of the cabinet decision if there is evidence of a rush to pre-empt final regulations. The panel's recommendations can be implemented by amending or simply drafting regulations from existing laws, he adds. These include requiring ministerial approval for foreigners buying properties such as golf courses or game farms. High-value farmland, protected areas and land earmarked for restitution or redistribution will be included in this category. Criteria may include the level of job creation, investment, skills transfer and commercial partnerships with local communities. Preferential treatment for permanent residents and Southern African Development Community citizens, and rationalisation of chaotic land-use bylaws, are also under consideration. The panel has ruled out retrospective conversion of freehold to leasehold title. Nor does it want to limit future foreign tenure to 99-year leasehold, which is most likely to apply only in communal areas. Many tourist lodges and game farms are on communal land. Didiza previously said she favoured 99-year leases for noncitizens. The spectre of foreigners with bags of money descending on an African country to snap up properties most locals can't afford has always caused a political backlash, especially from the landless poor. In SA it has become a powerful political rallying point, backed by the ANC's failure to deliver on promises to alter racially skewed land ownership patterns. The ruling party is acutely aware of this, as demonstrated by President Thabo Mbeki's announcement in his state of the nation address that land ownership by foreigners will face regulation this year. But the ANC has also gone to great lengths to convince local and foreign investors that government has no intention of caving in to populist demands likely to harm the economy. It is probably no coincidence that the panel chose to compare restrictions on foreigners in countries such as the US and Australia, though Didiza says the report was not subject to any political influence. It is unclear whether the cabinet will endorse the panel's recommendation on freezing land sales to foreigners, and when it would come into effect. Gutto, who has put in a request to raise the panel's budget from R1m to R1,5m to finish its work, is optimistic that the cabinet will decide in the next few weeks. Others are not so sure. Two government officials have told the FM that releasing the interim report is an exercise in gauging public opinion abroad and posturing to voters ahead of the March 1 local elections. They say it is doubtful the cabinet will arrive at a decision for many months. They believe government felt compelled to investigate the impact of foreign property owners on land reform because it was under pressure from black farmers' unions, opposition parties with a strong following among the rural peasantry, land activist movements and, more recently, powerful voices within the ANC alliance. Aggrey Mahanjana, who heads the National Emergent Red Meat Producers Organisation, welcomes the recommended freeze. He believes his group played an important role in convincing Didiza to appoint the panel, including a formal approach in 2004 to ANC chairman Mosiuoa Lekota. "This issue of land [shortages] is affecting us more than anyone else. If we hadn't worked on it, it wouldn't have happened." But it would be unfair to accuse the panel of being a tool to appease populist anger over land delivery. Its work will undoubtedly help clean up the chaotic national registry and allow land policy to be based on fact rather than public perception. | |
South African Migration Project (SAMP) - Queen's University - http://www.queensu.ca/samp |