Understanding South Africa’s New Expropriation Act and Its Impact

10 Feb

On 24 January 2025, South Africa enacted the Expropriation Act 13 of 2024 (New Act), replacing the Expropriation Act 63 of 1975 (Old Act). The New Act aims to align expropriation laws with the nation's constitutional principles and address historical land ownership disparities.

Purpose and Scope

The New Act's preamble states its purpose is to "provide for the expropriation of property for a public purpose or in the public interest." Notably, "property" encompasses both movable and immovable assets, broadening the scope beyond the Old Act's primary focus on land. A significant addition is the provision to "identify certain instances where the provision of nil compensation may be just and equitable for expropriation in the public interest." This contrasts with the Old Act, which did not address the possibility of nil compensation.

Key Changes

Definition of Property: The New Act clarifies that "property" includes both movable and immovable assets, expanding the scope of expropriation beyond the Old Act's primary focus on land.
Nil Compensation: The New Act specifies circumstances under which it may be just and equitable to offer no compensation for expropriated property. Examples include land that is not in use and held solely for speculative purposes, or abandoned land. The Old Act did not address the possibility of nil compensation.
Alignment with the Constitution: The New Act aligns with Section 25 of the Constitution, which allows for expropriation in the public interest, including land reform, and mandates that compensation be "just and equitable," reflecting a balance between public interest and the interests of those affected. The Old Act predated the current Constitution and lacked this alignment.
Procedural Requirements: The New Act outlines clear procedures for expropriation, including requirements for notice, consultation, and the opportunity for affected parties to make representations. It also provides mechanisms for dispute resolution and access to courts. The Old Act's procedural provisions were less comprehensive.

Controversies and Responses

The introduction of the New Act has sparked significant debate. Critics argue that provisions for nil compensation could undermine property rights and deter investment. Internationally, figures like U.S. President Donald Trump have expressed concerns, with Trump threatening to cut aid to South Africa over the policy. In response, President Cyril Ramaphosa has defended the Act, stating it aims to address historical injustices and promote equitable land distribution.

Conclusion

The Expropriation Act 13 of 2024 represents a significant shift in South Africa's approach to land reform and property rights. By broadening the definition of property subject to expropriation, introducing the possibility of nil compensation in specific circumstances, and aligning more closely with constitutional principles, the New Act seeks to address historical inequalities while balancing the interests of the public and property owners. As the Act comes into effect, its practical implications will become clearer, shaping the future landscape of property rights and land reform in South Africa.

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