High-level discussions between the Treasury and human settlement officials over tax incentives for landowners who release or donate their land for human settlement are taking place, with the latter pushing for its programmes to be zero-rated.
The department of human settlements in a white paper said its institutions would be encouraged to raise funding directly from the capital markets and be less reliant on grant funding as they enjoyed implicit government guarantees.
“A range of tax-based regimes, vis-à-vis discounted state-owned land, income tax [broad-based BEE], the deeds registries, transfer and stamp duties and other related tax exemptions will be explored,” the paper reads.
“Mechanisms such as incentives for those who donate land for human settlements and an affordable housing levy with a matching contribution from the employer will be explored.
“The department will pursue a trajectory and advance a notion whose noble intention is to advocate for its programmes to be zero-rated to enhance affordability.”
Despite 5-million houses having been built since 1994, there is still a great need for adequate human settlements in the country, which has about 3,200 informal settlements.
Department of human settlements spokesperson Tsekiso Machike said the discussion included the SA Revenue Service (Sars). “Yes, the department has been in discussions with the Treasury. The discussions have included provinces and Sars. The regulations will be finalised after discussions between the ministries of finance and human settlements are concluded.”
President Cyril Ramaphosa, in his state of the nation address last week, said the government will build more housing in SA’s city centres, closer to work and business opportunities.
Cocktail of issues
The white paper said despite millions of RDP houses having been built over the past 30 years, there had been a notable decline in the provision of housing and serviced land since 2009.
It said this was due to a cocktail of issues including escalating costs of construction materials and products, limited bulk infrastructure, and inadequate grant absorptive capacity of the construction industry. Then there were project initiation or completion delays due to social issues and unlawful activities such as unlawful land occupation and disruption of construction project sites by “construction mafias”.
The policy document said a suitable land expropriation framework would be developed so that the potential of underutilised, well-located and developable land was unlocked.
“Government-owned land suitable for human settlements will be released for human settlement purposes and uses. Alternatively, where ownership of the occupied land is in private hands, the government will enter into land or donation agreements to prevent delays in infrastructure provision and will use available land acquisition mechanisms, including expropriation of well-located land where relevant,” it said.
“Municipalities with the support of provinces will conduct regular audits, identify unused or underutilised pieces of land, and land properties available in their jurisdiction. This will be undertaken with the assistance of professionals and communities including civil society organisations engaged in issues related to access to land and prevention of unlawful land occupation.”
The paper also reveals that a 30-year (2024-54) national human settlements sector plan will be developed and maintained within the national system of development planning.
It said this plan would indicate short-, middle- and long-term activities and should give effect to the objectives of the district development model while focusing on area-based planning approaches in the local government sphere. An automated, online and transparent system would replace the national needs register for housing allocation, prioritising the most vulnerable households.
“Priority will be given to households who are not able to independently provide for their own housing needs. Therefore, the most vulnerable members of our society will be prioritised,” it said. “Linked to this targeted prioritisation are the approved military veterans and people with special housing needs. All existing waiting lists and housing demand databases will be consolidated into a single portal.
“This includes data sets on human settlements that are held by entities within the sector. All housing needs will be recorded in one data bank and registered in one system that will be determined by the national government.”
The Housing Code will be reviewed as part of the reforms, which will include legislative review and reforms including the Prevention of Illegal Eviction and Unlawful Occupation of Land Act 19 of 1998, and the repealing of the Housing Act.
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