Land reform: Audit report recommendations include land value tax

Criticised by land researchers for bearing ‘no relationship whatsoever to the findings of the audit itself’ (Fin24), the November 2017 land audit report ,only recently posted on the Department of Rural Development and Land Reform website, nevertheless makes two recommendations worth noting, reports Pam Saxby for Legalbrief Policy Watch. One is that a ‘land reform and development fund’ should be created with three possible sources: a ‘land value tax’, based on the 2004 Municipal Property Rates Act and collected by the Office of the Valuer-General; private sector contributions, including those being made by commercial farmers already participating in land restitution, redistribution and tenure reform programmes; and corporatising the department’s property management portfolio and agricultural land holding account, which has been dormant since 1994.

Apparently needing to be ‘understood’ in the context of a draft Regulation of Agricultural Land Holdings Bill released almost a year ago for comment (Fin24), the report also recommends that Parliament pass ‘overarching national land rights legislation’ to ‘operationalise’ the constitutional injunction that ‘South Africa belongs to all’. As Legalbrief Today reported last April, with the aim of identifying agricultural land for redistribution the draft Bill sought at the time to empower the Minister to prescribe categories of agricultural land holdings, and caps on the size of each category per district, in accordance with ‘land capability factors’. It was envisaged that any land exceeding the prescribed cap would automatically be deemed available for redistribution, but that the owners concerned would have an opportunity to decide which portion they wished to retain.

According to the report, the ‘overarching national land rights legislation’ government has in mind would also: define land-related ‘rights, restrictions and responsibilities’; and ‘determine transitional mechanisms, where need be’ for moving from the prevailing land tenure system to one proposed in the 2011 land reform Green Paper. As Legalbrief Today has regularly reported, this comprises four tiers: state and public land (leasehold); privately owned land (freehold, with limited extent); land owned by foreigners (freehold, but of ‘precarious tenure’ linked to specific ‘obligations and conditions’); and communally owned land (communal tenure, with ‘institutionalised use rights). In that context, provisions in the draft Regulation of Agricultural Land Holdings Bill seek to impose two pre-conditions on prospective agricultural land acquisition by foreign nationals. Either a black person (as defined in the Employment Equity Act) should have a controlling interest in the portion concerned or tenure should be restricted to long-term leasehold. 

Against that backdrop, according to the report a ‘B’ version of the 2015 Extension of Security of Tenure Amendment Bill and a 2017 Communal Property Associations Amendment Bill now before Parliament are merely interim measures with one common underlying objective. They seek to respond to the ‘extreme pressure’ government is apparently under to urgently provide ‘relief’ in respect of ‘pertinent areas of insecure land tenure’. This also informed a Communal Land Tenure Bill released in draft form last July for comment. While there has been no official word of that particular piece of legislation since then, the Extension of Security of Tenure Amendment Bill was the focus of a departmental briefing last month. The Communal Property Associations Amendment Bill is being finalised by the National Assembly’s Rural Development and Land Reform Committee.