A few nights ago, my father called me.
“Should we sell our house?” His voice carried quiet unease.
“Why do you ask?” I already knew the answer.
He sighed. “You think they might come for our house with this Expropriation Act? Maybe we should sell while we still can and put the money somewhere safer?”
Since President Cyril Ramaphosa signed the Expropriation Act into law, these questions have been creeping into conversations around dinner tables, and the media has been flooded with information. Some say there is nothing to worry about. Others warn of a worst-case scenario.
My parents are not political analysts or high-flying investors. They are ordinary pensioners who worked their whole lives to pay off their house and build a small pension. They do not follow every twist and turn of policy debates, but they know enough to worry when the rules seem to change.
This piece is not about telling anyone what to do. The goal is simple: lay out the facts and risks as I did for my father. Because, if he is asking these questions, so are many others.
Here’s what I told him.
“Yes, there are risks”
Say what you will of banks, for many South Africans, the value of banks lies in their ability to turn dreams into realities – buying a first home or building a small business – often begins with a loan. Banks make this possible by lending money with a safety net: the borrower’s property. This is called collateral-backed lending. Should the loan go unpaid, the bank can sell the collateral to recover their losses. Almost anything can be used as collateral, as long as it is tradable, and has a known and preferably stable market value.
But make no mistake, this system is not designed solely to uplift the ordinary dreamer. Its purpose is to shield the banks themselves. This is called credit risk management, and it is the core practise that keeps banks willing to lend. For centuries, this delicate balance of trust and expectation has underpinned economies worldwide.
This stability is now under threat in South Africa. The Expropriation Act (Act), by allowing the government to expropriate property, potentially for less than its market value, disrupts the system in two important ways.
First, if you have a loan secured by collateral, the Act puts a question mark over the value of the collateral. Since property can now be expropriated and might be compensated for less than it is really worth in the market, banks can no longer count on it having a steady, predictable value. This forces them to rethink how they view collateral and how to secure their loans.
Second, if the government expropriates collateral, banks can no longer sell it to recover outstanding loans. According to the Act, the original owner of the property remains liable for any outstanding debt tied to the property, even after the property is expropriated. Ordinarily, compensation would cover the debt, but we do not know this for certain. The formula used to determine compensation factors other than market value. So, instead of paying a property’s full market value the owner could be left with far less than their property is worth.
If compensation falls short of the debt, owners will have to repay a loan on a property they no longer own. If the expropriated property was used to generate an income, then that income will also be lost, which will make it even harder to pay the outstanding debt.
Finally, these risks force banks to respond. Because of the uncertainty around the value of collateral, and potential default on loans, there are now higher credit risks. Higher credit risk means higher interest rates and tighter lending conditions. It also means reduced access to credit—particularly for first-time homebuyers, small businesses, and those with weaker financial profiles. As borrowing becomes more expensive, demand for property and business investment will decline. As fewer people can access financing property prices will drop.
This essentially means that banks will think twice before issuing new property loans in an environment where title deeds can be arbitrarily revoked.
“This is not just about homes”
The risks of expropriation extend far beyond homeowners, property developers, commercial landlords, and farmers. It includes any and all property.
The Act ties its definition of “property” to the Constitution, and the Constitution makes it clear, “property is not limited to land.” (Section 25 (4)(b)). That means property is anything you can own. It is not just the roof over your head, it is the stuff under it. It could be a bicycle in the garage, a record collection you’ve built over decades, or the patent on an idea you turned into a small business. Property is a mine, a trademark, and a pension.
For a better understanding, it is worth visiting the Institute of Race Relations (IRR) website to read their EWC FAQs. Land may be expropriated without compensation, and the Act contains various other contentious clauses.
“No, the government is likely not coming for your house tomorrow. But this is a battle worth fighting.”
One of the most common responses from those defending the Act is that people are overreacting. “The government isn’t going to take suburban homes,” they say. And for now, they might be right.
But laws are written for the long term. Today’s government may have no immediate plans to seize homes, but the legal framework now exists to allow it in the future. The fight against expropriation isn’t just about what happens today—it’s about preventing a gradual erosion of property rights over time.
Throughout history, we’ve seen how policies that begin as “targeted” interventions expand over time. The shift from private ownership to state control, is a slippery slope that has played out in other countries. South Africa is not immune to this pattern.
Defending property rights has little to do with protecting the wealthy — it is about protecting economic freedom, and by doing so, it is about enabling the poor to mobilise.
“I’ve heard the arguments in favour of expropriation. Here’s why they don’t hold up.”
Supporters of the Act often try to reassure the public that it won’t be as damaging as critics fear. They argue that land reform is necessary, that expropriation will be done fairly, and that compensation will follow a “just and equitable” framework. But when pressed on specifics, their answers reveal just how uncertain and impractical the policy really is.
At a recent webinar, I asked a senior government official responsible for land reform a simple question: If land reform is truly the priority, why isn’t the government focused on issuing title deeds to people who have already received land? Why push for expropriation rather than fixing the failures of previous land redistribution efforts?
The response? The official admitted that giving title deeds to beneficiaries is “controversial” because many black South Africans hold land communally rather than through individual ownership. In other words, the government is hesitant to grant full ownership rights because it would disrupt family or community structures. But this raises a deeper question: If individual ownership is seen as too disruptive, how can South Africans ever expect true land security? How can property be an asset if it remains locked in bureaucratic limbo?
I also asked: Where will the money come from to compensate landowners under expropriation?
Again, the official’s response was telling. Restitution claims — where claimants prove historical land loss — are already funded. However, when it comes to compensating for expropriated property, the Department of Public Works will be responsible for funding expropriations. This means limited resources will be diverted away from potential infrastructure investments (that could have positive multiplier effects), to what is, in effect, the nationalisation of property by a state that struggles to manage what it already owns.
The Act is a vague, underfunded policy with unpredictable consequences. It has already sown uncertainty. And uncertainty spreads like wildfire.
“What now?”
As our conversation drew to a close, my father sighed. “Okay,” he said after a long pause. “But what do we do then?”
It’s a fair question, and it’s one that many South Africans are asking. What can ordinary people do when the government is set on pushing through policies that undermine property rights and economic stability?
First, support the institutions that are fighting back. Organisations like the IRR are actively pushing for amendments to the Act, exposing the risks, and holding policymakers accountable. They rely on public backing to challenge bad policy and to keep the pressure on government.
Second, speak up! According to the latest round of polling by the Social Research Foundation, only 6% of South Africans are undecided about how they feel about the Act while 66% do not think it is a good idea. That means the battle for public opinion has largely been won, but the government is hoping that those who oppose it will stay quiet, that their resistance will fade. That cannot be allowed to happen.
Give your family and friends the facts. Share what you know. Push back when someone dismisses the risks.
“Dad, you and mom spent your entire lives building something. Your fear of losing all you have worked for is not irrational. Do not let anyone dismiss it as an overreaction.”
[Photo: a house somewhere in South Africa]
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