Expropriation – what it means for your finances

Source: ChatGPT.

Depending on who you’re talking to, it’s either the better-late-than-never silver bullet that will obliterate land inequality and right South Africa’s historical wrongs or the biggest threat to our Constitution and a throwback to apartheid’s ugly displacement laws.

Last month’s signing of the new Expropriation Act catalysed the current discourse, which has ruffled feathers even in places as far afield as the United States.

Despite the heightened tensions, President Cyril Ramaphosa doubled down on South Africa’s position in his 2025 State of the Nation Address, citing the country’s core values as peace and justice; equality and solidarity; and non-racialism and democracy, among others. The very next day, the US announced that it would be halting foreign aid to South Africa, cutting off a vital lifeline to many of those most vulnerable and raising the question, where to from here?

Whether the fears surrounding the Act are unfounded or not (and I believe they are), what is true is that we’ve seen concerns surface from our clients around property rights, investment stability and a potential rise in wealth emigration.

Understanding the Expropriation Act – what it is, and isn’t

When these concerns are raised by our clients, I explain that it’s important to cut through the noise and understand exactly what the new Expropriation Act entails.

Firstly, expropriation is not a new thing or in any way unique to SA – there are several countries with similar frameworks in place. For example, Namibia has legal provisions for expropriation with compensation via a ‘willing buyer, willing seller’ approach. At the same time, Brazil’s constitution allows for the expropriation of unproductive land, with compensation paid in government bonds.

In essence, South Africa’s new Expropriation Act refines existing regulations rather than introducing new far-reaching expropriation powers, with several key updates.

While the 'willing buyer, willing seller' approach was widely used in South Africa’s post-1994 land reform policy, Section 25 of the 1996 Constitution allows for expropriation with compensation based on just and equitable principles. The new Expropriation Act does not overhaul these compensation rules but provides for nil compensation in specific cases, such as abandoned properties or land held for speculation.

At the same time, the Act strengthens protections for landowners by enforcing a structured process, greater judicial oversight and placing the burden of proving fair compensation on the state. Landowners also now have more rights to object, mediate and challenge expropriation in court.

Land can also only be expropriated for public purpose (e.g. infrastructure like Gautrain) or public interest (e.g. land for redress/restitution).

In short, the Act is mostly procedural, ensuring a controlled and legally governed process – rather than serving as a fully-fledged Land Reform Act.

Will the new Act impact your finances?

While fears around property rights and asset security appear to be largely unfounded, uncertainty – in general – does have real-time investment implications, and is linked to heightened market volatility. Investor sentiment plays a pivotal role in asset pricing, and when confidence wavers, we often see increased market fluctuations.

In times like these, a well-diversified portfolio – paired with expert financial advice – is one of the best tools to manage risk. Spreading investments across asset classes, industries and even geographic regions can help mitigate the impact of short-term market swings, while having the right partner to guide you – helping you avoid reactive or emotional investment decisions – ensures long-term financial resilience.

Will the Act drive more South Africans to explore offshore options?

Anecdotally, we have seen an increase in citizens exploring offshore investment options and external wealth diversification over the past few years, but this was in motion long before the new Expropriation Act was signed. However, the Act has further amplified discussions around wealth diversification.

This growing appetite is fuelled by a combination of economic and regulatory factors, alongside personal motivations like wealth preservation and long-term financial security. Moreover, as the Baby Boomer and X generations enter retirement, we’re seeing a transfer of wealth, with the children of these retirees having more opportunity to travel and become global citizens.

This is where financial advice can play a powerful role. We encourage parents to work with a professional to create frameworks and commercially sound asset structures that will allow for the transfer of wealth while empowering and supporting the next generation to continue to grow their wealth, reducing the risk of waste or mismanagement. It can take two to three generations to build wealth – yet half a generation to wipe it out.

Ultimately, while fears around the Expropriation Act may be baseless, the reality is that financial markets are influenced by perception as much as policy. Good financial planning is essential all the time but it is especially vital in times of economic and regulatory shifts. We encourage consumers to take control of their own futures by seeking the right advice to help them build and protect their financial dreams.