Don’t Panic
Here is something to think about with
regards to land ownership by foreigners as muted by President Zuma at SONA2015:
Learned and legal minds have been writing about this for
some time now in South Africa and I thought I’d share some of their thoughts
concerning this.
·
No reversals are possible – the
administrative and logistics, costs and legal ramifications makes it impossible
to reverse any transactions already done with foreigners. Property ownership is
held in personal names, companies, trusts, partnerships, shareholdings etc and
just to do deed searches on all these and then to determine/define whether the
owner of the property is strictly a foreigner (without permanent residence,
work permits, business interests in the country or a majority shareholder in
the property owning company) and then after this to force reversal of ownership
is a task that is simply impossible.
·
There is no law promulgated and adopted yet
so deals can still occur for foreigners – to enact some type of law in this
regard will probably take many, many years to achieve (if ever) and between now
and then (if ever) the above would apply.
·
Belief is that if ever a law like this is
passed, it would be constrained to agricultural land only or agricultural
land up to a certain size but even then, the above two points still apply.
Sectional titles, residential properties and commercial properties in all
likelihood would be excluded. For commercial properties, this is no more
apparent than the R 80 billion Chinese development in Johannesburg (labelled the 2nd Sandton), where construction has already began with the approval of government just
recently – again the point that this can never be reversed.
·
In many countries around the world and
including western countries, foreigners are also not allowed to own land
unless they become citizens as well so it’s not that “whacked”. In fact in
Europe now, many countries offer foreigners automatic citizenship if they acquire
property or establish businesses there. The same could happen here to attract
investors and in fact was said as such by the president this morning. He implied
that foreigners are welcome to buy here but they must also invest in businesses
at the same time or become citizens and invest in businesses and not just own
property to be used for vacations once a year and not add value – mmmm? you can
debate this for yourself
·
As muted, if no ownership is given then long
leases will be given to foreigners – again nothing new here and it happens
all over the world and including western countries (99 year leases up to 999
year leases). These leases can be mortgaged by banks, are tradable,
renewable in perpetuity, are transferrable to surviving spouses upon death and can
be used as collateral (jokingly though, do we as humans ever own a
property? – we merely exclusively occupy properties while we are alive and the
properties will always still be there even after many generations have come and
gone)
Look, the bottom line is, there has to be some form of land ownership correction in South Africa and we
must all accept that. Most commentators though believe that political rhetoric
is the order of the day with this current government in order to appease the
majority but at the end of the day concessions will be made mainly for
agricultural and rural land reform.
Sure this form of
rhetoric does not help the situation so we must just manage it until all is
made clear.
Managing it means; continue as
normal as nothing has legally changed and if sentiment is a problem right now,
perhaps the above will help you communicate this to your foreign clients.
My take to clients would
be: BUY NOW before the law changes!!
For properties we have available right now, go to our website!
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