Land affairs officials yesterday mooted the prospect of a land tax to add much-needed funds to government's cash-strapped land reform programme, and bring down property prices.

The proposal which comes shortly after the department's suggested land-purchase restrictions on foreigners is likely to raise as much dust as it did when it was first flighted during Derek Hanekom's tenure as the country's land minister.

But deputy director-general Glen Thomas, speaking on minister Thoko Didiza's behalf at the Black Management Forum conference yesterday, mooted the land tax as a solution to a number of urgent problems facing his department.

"It is high time we introduced a land tax," he said. "This would help us finance land reform (and) ensure prices for buying land are affordable."

Thomas said yesterday that the "lack of finances" for land reform remained one of the major problems facing the land affairs department.

Last week, Didiza conceded for the first time that government did not have the R13bn needed to complete its land restitution process by 2006, as expected by President Thabo Mbeki.

Government is aiming at a process of restitution and redistribution that will see 30% of farmland in black hands by 2014 but recent figures suggest only 3% of that land has been transferred.

Thomas said that a land tax would be a disincentive for those people wanting to hold property "only for speculation" which could help bring down property prices.

"I don't think a land tax would scare investors; it is a common international practice," he said.

Thomas said this proposal arose after government noted how some municipalities were using a regressive tax system in effect reducing taxes as a property owner bought more land.

Although he did not say exactly how he expected a new land tax system to work, he indicated it could be a reverse of such a municipal tax regime.

Thomas said that the land tax proposal was borne out a need to find "creative" solutions to finance land reform in SA to ensure that targets were met.

Over the past few months, the chorus of voices has grown, warning of a Zimbabwe-style backlash if land is not given back to black people, dispossessed by the apartheid regime.

The issue of SA's cashstrapped land programme was also raised at the Black Management Forum conference in earlier sessions.