Media reports have publicized the fact that the hot political potato of foreign land ownership in South Africa is once again about to be brought before Parliament, and this time most of the ‘reforms’ – possibly all – will probably get the approval of the house. The new draft bill proposes, among other things, that
1. Ownership of land by foreigners now be ‘limited’ or ‘regulated’ by replacing ownership for non-South Africans with long term leases and by limiting the amount of land such people can own in South Africa;
2. South African citizens should be given priority access to all land owning, particularly that released by the state; and
3. More land should be made available for land reform.
Commenting on this draft legislation, Bill Rawson, Chairman of the Rawson Property Group, repeated a warning that he has made previously when this subject was raised.
“I and most of the senior spokespeople in the South African property world agree that proposals of this kind give a very bad impression to those who are planning to invest here. How can one say to a foreigner, ‘we welcome any capital that you care to put into our industry or commerce but we will regulate you in one way or another if you want a home here or would prefer to own rather than to rent your work premises’?”
Ironically, said Rawson, the new bill also proposes that South Africa ‘creates an environment which is encouraging to foreign investment’. This, he said, will not be the case if the proposals in the new legislation are accepted.
Rawson said that many years of experience in selling homes to such people has shown him that people from overseas who buy a holiday or retirement home in South Africa often end up investing here in some form of business or on the JSE Securities Exchange.
“Quite apart from the fact that every seven visitors to South Africa create one new job, home ownership in South Africa has time and again led to a beneficial involvement in other spheres here,” said Rawson.
In his view, he added, it is also ‘wrong thinking’ that foreign ownership leads to a smaller piece of the cake for locals.
“The more foreign buyers invest here, the more local builders are able to build new housing opportunities. This simple and very obvious fact has time and again been proved and is at the moment particularly evident in the Somerset West area, which in recent years has added greatly to its security estates partly as a result of its large English and German population.”
Issued by Rawson Property Group.