In January 2025, President Cyril Ramaphosa signed the Expropriation Act, 13 of 2025, into law, replacing the Expropriation Act, 63 of 1975. The legislation provides a framework for the expropriation of property to ‘serve public purposes or the public interest’. The law sets out procedures for expropriation and compensation, and identifies situations when expropriation without compensation may be considered ‘just and equitable’.

The possibility of expropriation without compensation has attracted the most attention, even escalating internationally. Misinformation about the intention and application of the Act could do political and economic damage to our relationships with many international trading partners, especially the USA.

So, what exactly does the Expropriation Act allow? And how will it affect landowners in our country, including white commercial farmers?

The Expropriation Act

Although President Ramaphosa signed the Act into law, it had not been proclaimed in the Government Gazette by 22 April 2025, and therefore was not yet in effect. It will take effect only once it has been gazetted. However, despite all the outrage and opposition, the new law has relatively little to say about expropriation without compensation. The following key points may affect your decisions about property investment:

• Any expropriation of property in terms of the new Act must be in line with the provisions in section 25 of the Constitution, which guarantees property rights.
• The Act, contrary to popular belief, places onerous conditions on the state or any expropriating authority before property may be expropriated, either for a public purpose or in the public interest.
• Anyone affected by a decision to expropriate property has several legal remedies available during the expropriation process, including being able to challenge the compensation amount.
• Expropriation without compensation is applicable only under circumstances considered ‘just and equitable’. This will need exceptional circumstances, and the Act excludes property rights falling under investment in key sectors like mining, telecoms and other infrastructure.
• Specific scenarios under which expropriation without compensation is applicable include:
  • The land is not being used, and the owner’s main purpose is not to develop the land or use it to generate income, but to benefit from appreciation of its market value.
  • An organ of state holds land that it acquired at no cost, is not using for its core functions, and is unlikely to need it for future activities in that regard.

The Act establishes the following strict procedures that the expropriating authority must adhere to during the process:

• An investigation to evaluate the property’s suitability for its intended purpose.
• Identifying any associated registered or unregistered rights.
• Collecting essential information to determine fair compensation.
• Notifying the property owner of the state’s intention to expropriate.
• Publishing a notice of intention to expropriate.

At any stage, the property owner has the right to appeal and legally dispute the appropriation process.

Commercial farming

The updated law has naturally raised fears among farmers about the security of their land and livelihoods. AgriSA, a prominent agricultural trade organisation, believes that the Act introduces political and investment uncertainty that could bring instability to the sector and weaken economic growth – currently estimated at 2.5% for 2025.

Many commercial farmers are not opposed to the intention of the Act – they realise that land redistribution is overdue and necessary in what remains an inequitable system – but they have legitimate concerns about its implementation.

Land redistribution

Many interpretations of land ownership in SA, especially commercial farming land, rely on inaccurate numbers. Even as recently as early 2025, Reuters reported that ‘only 4% of privately held land is owned by black people, who are nearly 80% of South Africa’s population of 60 million’. However, this figure refers only to a subset of rural land registered to individual owners at the Deeds Office, according to a 2017 land reform audit. It excludes private land held by trusts, companies and community-based organisations.

According to Stats SA, in 1993 the largest share of white-owned land in South Africa belonged to farmers, but not as much as is often assumed. Individual farmers owned about 62.4 million hectares, or about 51% of the country. The balance was owned by partnerships and companies that could be considered ‘white’, as well as by the state. Not all this property was commercial farmland.

The 2017 Land Audit report revealed clear shifts in land ownership patterns since 1994. It found that 28 million hectares (23% of South Africa) is in state ownership. Much of this land could be repurposed, whether for land reform or some other public use. The new Act identifies this process as one that requires nil compensation.

The 3.5 million hectares of private land owned by community-based organisations in the 2017 audit includes land transferred to communal property associations (CPAs), which are legal entities established to hold land transferred to black communities through land reform. By 2024, these CPAs owned a total of 2.6 million hectares, about twice the area registered to individual black landowners in 2015.

Economists recently estimated that by the end of 2024, 2.4 million hectares had been bought privately by black people and, if you consider the dispossessed land for which claimants have received financial compensation, the equivalent of 24.9% of formerly white agricultural land has moved from white to black ownership since 1994.

What these numbers tell us is that land ownership – including the commercial farming sector – has certainly changed since 1994.

Nedbank offers a comprehensive set of lending, support, advice and financing for a wide range of agri-related businesses, including small-scale and larger commercial farming.