Promulgation of the Act, due on 1 August, could erode property rights as well as investment, say opposition parties.
President Jacob Zuma is expected to promulgate the Property Valuation Act of 2014 on 1 August. The Presidency said in a statement on 29 July that the Act would see an independent statutory body deciding the purchase price of land sought by the state for expropriation.
But major political parties object to the Act, stating that it might lead to a decline in property investment and economic growth and could erode property rights in South Africa.
Dr Anthea Jeffery, head: policy research, South African Institute of Race Relations, says the is part of a broader pattern where the state seeks to own and control more land and property. She says the negative ramifications of the Act may include property being unfairly expropriated, inaccurate property valuations and banks’ taking a more conservative approach to lending.
The Property Valuation Act, the Expropriation Bill and the reopened land claims process, in combination, are likely to unsettle property rights, but the property industry, like the economy, requires secure property rights for investment and growth. The Act has a wide ambit, and land which can be claimed in the process is not confined to farming land,
Jeffery says that it is inappropriate that the valuation of property be vested in a state official who is appointed by the minister of rural development and land reform and is accountable to that official. The minister is empowered to set regulations regarding valuations, and this creates uncertainty about what other criteria may be laid down in future, she adds.
Meanwhile, the Democratic Alliance (DA) has also objected to the Act. The party says that the office of the valuer general is not the correct mechanism to intervene in these matters, and might discourage investment and destroy jobs. The DA shadow minister for rural development and land reform, Thomas Walters, says the ANC government’s vision as represented in laws coming before Parliament is not workable and will hit the poor hardest when job losses, disinvestment and food security issues pile up.
The Act was introduced by the government to remove an obstacle to land reform whereby large sums of money had to be spent on compensating land owners because of the “willing-buyer, willing seller” principle. Linda Page, spokewoman for the department of rural development, says the implementation of the Act and the office of the valuer general will ensure the fair pricing of property and help eliminate distortions in land prices.
“The absence of a valuer general is a primary factor in the insufficient progress made in land redistribution in South Africa. The establishment of this office aims at giving effect to the constitution, which facilitates land reform through the regulation of the valuation of property,” Page says.
This article originally appeared in Neighbourhood, Sunday Times.