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How to apply for a housing subsidy in South Africa

Aqeelah Bawa-Osman Aqeelah Bawa-Osman
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The housing problem in South Africa hit crisis levels, and although there are plans to aid the current situation through government intervention, there are still countless people living in abject poverty. The National Department of Human Settlements has initiated a plan to tackle Gap housing, allowing for a housing subsidy for low income households (R3,500 to R15,000), which is too little to enable them to purchase in the private property market, and too much to qualify for state assistance in the form of home loans or RDP houses. This homify feature will help you with your subsidy requirements and process, necessary if you're a first time home buyer.

Who can apply for a housing subsidy?

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You will qualify for a housing subsidy from the government, if these statements apply to you: 

- Need to be on the municipal housing demand database for a minimum of 10 years (proof required).

- Preference given to those 40 years old or those with special needs.

- Married or living with a long-term partner/single or divorced with others who relying on the income.

- A South African citizen or a permanent resident's permit.

- Older than18 years of age or if under 18, married or divorced with others relying on your income.

- A monthly household income before deductions less than R3,500.

- Never received a subsidy from the government and never owned property.

- You and your family will live on the subsidised property.

What can housing?

The housing subsidy can be used to buy an existing house.

​How much is the housing subsidy worth?

If your monthly household income is less than R3,500, you will qualify for a subsidy of R160,573. This subsidy doesn't need to be repaid as it isn't a loan. Once you can prove that you are disabled or in permanent bad health, you will qualify for a housing subsidy, and a set disability variance amount that will pay for the cost of any extra features your house may need, such as a ramp for wheelchair access.

How to apply for a housing subsidy?

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Two types of housing subsidies are available, based on whether you are able to pay a contribution out of your savings, or if you need to borrow money to pay for it.

The non-finance-linked individual subsidy is applicable if you can contribute, in full, out of your pocket. You will need to apply for a non-finance-linked subsidy, by completing an application form at the Department of Human Settlements or contact your local municipal offices.

Alternatively, the finance-linked individual subsidy is for those who can't afford to pay your contribution, in full, out of pocket and will need to apply for a loan from a bank or another financial institution. However, you need to be pre-approved for credit with an approved financial institution before applying for this subsidy at the Department of Human Settlements or at your local municipal offices.

Documentation?

You will require the following documentation to apply for a subsidy:

- Proof of registration from the municipal housing demand database (waiting list). 

- A certified copy of you and your partner’s official South African ID book or card.

- The certified birth certificates or ID numbers of those who rely on your income (children or grandchildren).

- A certified copy of your marriage certificate, if you are married.

- A certified copy of your divorce decree, if you are divorced with financial dependents.

- An original recent payslip as proof of income. Or an affidavit to confirm that you are unemployed.

 In order to apply for a non-finance-linked individual subsidy, you will also need:

- To supply a certified copy of the signed agreement of sale for the property.

- Make the sale conditional to receiving a housing subsidy, as well as a certified copy of the seller's title deed.

 However, if you are applying for a finance-linked individual subsidy, you will also need:

- To include a certified copy of the signed agreement of sale.

- Make the sale conditional to your receiving a government housing subsidy as well as a house bond.

- Provide proof that the house bond has been approved.

How is the subsidy paid out?

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Once your application is successful, you will receive this subsidy only once. It isn't a cash pay-out, and is paid directly to:

- The financial institution from which you are receiving a housing bond or a conveyancing attorney (in the case of finance-linked individual subsidies).

- Or the seller (in the case of non-finance-linked individual subsidies).

In order to prevent fraud, in cases where a homebuyer has to make a contribution to the cost of a house, the buyer will need to pay this contribution in full, ahead of the subsidy pay out.

Although, the housing subsidy isn't a loan and you don't need to pay it back. However, if you have a finance-linked individual subsidy, you have to pay back your loan to the financial institution.

For more information visit the Department of Human Settlements at 27 Wale Street, Cape Town or call the helpdesk on 021 483 6488 /3112 /0611 /8984 /0623 (Mondays to Fridays from 07:30—15:00). Also e-mail human.settlements@westerncape.gov.za for more information.

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