This subsidy is for low-income households wishing to buy residential property for the first time and may be used to purchase an existing house, including the land on which the house stands. This subsidy can only be used once by a successful applicant.

How much is an individual subsidy worth?

This depends on how much your gross (before deductions) monthly household income is. In 2015 the subsidy was worth the following:

• If your household income is less than R3 500, you qualify for a subsidy of R160 573.
• If your household income is less than R3 500 and you can prove that you are disabled or in permanent bad health, you qualify for a housing subsidy of R160 573, plus a set amount to pay for the cost of any extra features your house may need – for example, a ramp for wheelchair access.

The subsidy amounts are fixed and are increased in April of each year. You do not have to repay the subsidy as it is not a loan.

How much will I have to pay in?

You will have to pay the difference between the subsidy and the cost of the house. For example, if you buy a house for R180 573 and receive a subsidy of R160 573, you will have to pay in R20 000, plus the bond registration and conveyancing attorney’s costs. Transfer duty is not payable on properties below R750 000.

However, if you buy a house for R155 573 and receive a subsidy of R160 573, you will have R5 000 of the subsidy left over. You can use this to pay for at least part of the bond registration and attorney’s costs. Remember that the money will not be paid out to you, but directly to the relevant parties.

How do I apply for an Individual Housing Subsidy?

There are two kinds of Individual Housing Subsidies, based on whether you can pay your contribution to the house out of your savings, or if you need to borrow money to pay for it:

• A Non-Credit-Linked Individual Subsidy.
  This is what you get if you can pay your contribution in full, out of your pocket. To apply for a Non-Credit-Linked Subsidy, you will need to fill out an application form at the Department of Local Government and Housing or visit your local municipal housing office.

• A Credit-Linked Individual Subsidy.
  This is what you get if you cannot afford to pay your contribution, in full, out of your savings and need to do so using a loan from a bank or some other financial institution. You will need to be pre-approved for credit with an approved financial institution before you can apply for a Credit-Linked Subsidy at the Department of Local Government and Housing or at your local municipal housing office.

To apply for an individual subsidy you will need to fill out an application form at your provincial human settlements department, or go to your local municipal housing office for assistance.

What documents must I supply when applying for a subsidy?

You will need to supply:

1. A copy of your and your partner or spouse’s bar-coded South African IDs, and the birth certificates of your financial dependants
2. Your marriage certificate if you are married, or your divorce papers if you are divorced and have financial dependants
3. A recent payslip as proof of income

If you are applying for a non-finance linked subsidy, you will need to supply a certified copy of the signed agreement of sale for the property. Be sure to make the sale conditional to your receiving the housing subsidy.

If you are applying for a finance linked subsidy, you will need to supply a certified copy of the signed agreement of sale for the property. Be sure to make the sale conditional upon your receiving a government housing subsidy as well as a home loan. You will need to provide proof that the home loan has been approved.

How is the Indidual Housing Subsidy paid out?

The subsidy is not paid out to you. It is paid directly to the financial institution from which you are receiving a home loan (in the case of a Credit-Linked Individual Subsidy) or the seller (in the case of a Non-Credit-Linked Individual Subsdy).

Will I have to pay anything back?

The housing subsidy is not a loan and you do not need to pay it back.