Quick Facts

• Government subsidy available for buyers earning R3,501 to R22,000 per month
• Minimum credit score of 610 needed for home loans
• Total buying costs are about 10% of purchase price
• Transfer process takes 8-12 weeks from start to finish
• Properties under R1,210,000 pay no transfer duty tax

Understanding the Home Buying Journey

Buying your first home in South Africa is exciting. But it can also feel confusing. This guide explains everything in simple steps.

You do not need to be rich to buy a home. The government helps first-time buyers through a special subsidy programme. Banks also offer 100% home loans to some buyers.

What Makes Someone a First-Time Buyer?

You are a first-time buyer if you:

• Have never owned a property before
• Never received a government housing subsidy
• Are 18 years or older
• Are a South African citizen or permanent resident

The Basic Journey

The home buying process has five main steps. Each step takes time. The whole process takes 8 to 12 weeks.

1. Check your affordability – Find out how much you can borrow
2. Get pre-approved – Bank confirms you qualify for a loan
3. Find your property – House hunting with your budget in mind
4. Make an offer – Submit an Offer to Purchase document
5. Complete transfer – Lawyers handle paperwork and registration

✅ First Home Finance (FLISP) Subsidy

First Home Finance (previously called FLISP) is a government subsidy. It helps low to medium income earners buy their first home. You can get between R30,001 and R169,264 towards your home purchase.

Who Can Get This Subsidy?

You must meet all these requirements:

• South African citizen or permanent resident
• 18 years or older and legally able to sign contracts
• Married, living together, or single with dependents
• Never owned property before
• Never received government housing subsidy before
• Earn between R3,501 and R22,000 per month (total household income)
• Have finance approval from a bank or other approved lender

How Much Subsidy Can You Get?

Monthly Household Income	Subsidy Amount
R3,501 – R7,000	R130,505 – R169,264
R7,001 – R15,000	R60,000 – R130,000
R15,001 – R22,000	R30,001 – R60,000

What Can You Use the Subsidy For?

The subsidy can help you:

• Buy an existing house or flat
• Buy a serviced stand with approved builder contract
• Build a house on land you already own
• Cover the deposit on your home purchase
• Reduce your home loan amount (lower monthly payments)

How to Apply for First Home Finance

Step 1: First get home loan approval from a bank. Banks that help with FLISP include Standard Bank, ABSA, FNB, Nedbank, Capitec, SA Home Loans, and others.

Step 2: Get your documents ready. You need:

• Smart card ID for all adults in household
• Birth certificates for children
• Marriage certificate (if married)
• Recent payslips showing your income
• Bank statements (last 3 months)
• Home loan approval letter from your bank
• Proof of South African citizenship

Step 3: Apply at your local Department of Human Settlements office or online at the First Home Finance portal.

Step 4: Wait about 7 days for processing. The National Housing Finance Corporation (NHFC) checks your application.

Step 5: If approved, the subsidy is paid to your lawyer’s trust account or your bond account when the property transfer is registered.

Home Loan Requirements

Banks look at several things when deciding if you qualify for a home loan. Your credit score is the most important factor.

Basic Requirements

• Age: You must be 18 years or older
• Employment: Permanent job for 6 months or self-employed for 2 years
• Credit score: Minimum 610 but 650+ is better for good interest rates
• Income: Regular monthly income to cover loan payments
• Affordability: Your debt payments should be less than 30% of income

Documents You Need

When you apply for a home loan, prepare these documents:

• Copy of your ID (smart card or ID book)
• Latest 3 months payslips
• Bank statements (last 3 months)
• Proof of address (rates bill or utility bill)
• Employment letter from your employer

If you are self-employed, you also need:

• Company registration documents
• Last 2 years financial statements
• Tax returns from SARS
• Bank statements showing business income

Understanding Credit Scores

Your credit score shows how well you manage debt. Banks use it to decide if they will lend to you and what interest rate to charge.

Credit Score Range	What It Means
700+	Excellent – Best interest rates
650-699	Good – Should get approved
610-649	Fair – May get approved with higher interest
Below 610	Poor – Very difficult to get approved

How to Improve Your Credit Score

• Pay all bills on time every month
• Pay more than the minimum on credit cards
• Keep credit card balances below 30% of limit
• Don’t apply for multiple loans at once
• Check your credit report for mistakes
• Settle old debts and judgements

About Deposits

A deposit is money you pay upfront when buying a home. Most banks want 10% to 20% deposit. However, some banks offer 100% home loans if your credit is good.

Benefits of paying a deposit:

• Lower monthly payments
• Better interest rates
• Easier loan approval
• You owe less money to the bank

Example: If you buy a house for R800,000 with a 10% deposit, you pay R80,000 upfront. The bank lends you R720,000. Your monthly payment is lower than if you borrowed the full R800,000.

⚠️ All Costs Explained

The purchase price is not the only cost. Budget for about 10% extra for all the other fees and costs.

1. Transfer Costs

Transfer costs are fees paid to the lawyer (conveyancer) who transfers the property into your name. These depend on the property price.

Property Price	Transfer Costs (Estimate)
R500,000	R15,000 – R20,000
R800,000	R22,000 – R28,000
R1,000,000	R28,000 – R35,000
R1,500,000	R40,000 – R50,000

2. Transfer Duty (Tax)

Transfer duty is a tax you pay to SARS when buying property. Good news: If your property costs less than R1,210,000, you pay no transfer duty.

Property Value	Transfer Duty Rate
R0 – R1,210,000	0% (No tax)
R1,210,001 – R1,860,000	3% of amount above R1,210,000
R1,860,001 – R2,990,000	R19,500 + 6% of amount above R1,860,000

3. Bond Registration Costs

Bond registration costs are fees paid to register your home loan at the Deeds Office. These also depend on your loan amount.

Home Loan Amount	Bond Registration Fee
R100,000 or less	R5,750 (includes VAT)
R500,000	R13,800 (includes VAT)
R1,000,000	R21,689 (includes VAT)
R2,000,000	R30,544 (includes VAT)

4. Bank Initiation Fee

Banks charge a fee to set up your home loan. As of December 2024, most banks charge about R6,000 (including VAT). You pay this even if your loan application is rejected.

5. Ongoing Monthly Costs

After buying, you pay these costs every month:

• Bond repayment: Your monthly home loan payment
• Monthly admin fee: R60 to R80 charged by the bank
• Home insurance: Usually required by the bank
• Municipal rates: Property tax paid to the municipality
• Water and electricity: Monthly utilities
• Levies: If you buy a flat or townhouse (R500 to R2,000+)

Complete Cost Example

Property price: R800,000

Deposit (10%)	R80,000
Transfer costs	R25,000
Transfer duty	R0
Bond registration	R18,000
Bank initiation fee	R6,000
Total upfront costs	R129,000

Step-by-Step Home Buying Process

Follow these steps to buy your first home. The process takes 8 to 12 weeks from start to finish.

Step 1: Check Your Credit Score

Get your free credit report from TransUnion or Experian. Fix any mistakes you find. Aim for a score of 650 or higher.

Step 2: Calculate Your Budget

Use online calculators to see how much you can afford. Consider all costs, not just the purchase price. Leave room in your budget for emergencies.

Step 3: Get Pre-Approved

Visit a bank or bond originator like ooba or BetterBond. They check your documents and tell you how much they can lend. This takes 1 to 3 days.

Benefits of pre-approval:

• You know your exact budget
• Sellers take your offer seriously
• You can move quickly when you find the right home
• Pre-approval is valid for 90 days

Step 4: House Hunting

Search for properties on Property24, Private Property, or through estate agents. Visit multiple properties. Don’t rush this step.

Things to check:

• Location and safety of the area
• Distance to work, schools, shops
• Condition of the property
• Municipal rates and monthly levies
• Ask to see electrical and plumbing compliance certificates

Step 5: Make an Offer to Purchase

When you find your home, you sign an Offer to Purchase (OTP). This is a legal contract. Do not sign unless you understand everything.

The OTP includes:

• Purchase price you are offering
• Deposit amount (if any)
• When you want to move in (occupation date)
• Conditions (like “subject to bond approval”)
• Who pays for what costs

The seller can accept your offer, reject it, or make a counter-offer. Once both parties sign, it is legally binding.

Step 6: Apply for Your Home Loan

Submit your full home loan application to the bank. They do a complete assessment. This takes 3 to 7 days.

The bank sends a valuator to check the property. If the property is worth less than the purchase price, the bank might lend less.

Step 7: Apply for First Home Finance (If Eligible)

Once your home loan is approved, immediately apply for FLISP at your local Department of Human Settlements. Processing takes about 7 days.

Step 8: The Conveyancing Process

The seller appoints a conveyancing attorney (but you pay the costs). This lawyer handles all the legal paperwork.

What happens:

• The attorney checks the title deed for problems
• Gets rates clearance from the municipality
• Prepares transfer documents for you to sign
• Coordinates with your bond attorney
• Submits everything to the Deeds Office

You pay all your costs (transfer fees, bond registration, etc.) to the attorney’s trust account.

Step 9: Registration at the Deeds Office

The Deeds Office checks all documents. This takes 7 to 10 working days. Once approved, your property is registered in your name.

Step 10: Move In

On registration day, the property becomes yours. The attorney notifies you. You can collect the keys and move in. Congratulations, you are a homeowner!

🚨 Property Scams to Avoid

Property scams are common in South Africa. Criminals target first-time buyers because they are less experienced. Be very careful with money transfers and payments.

1. Fake Property Listings

How it works: Scammers advertise properties that don’t exist or they don’t own. They use photos stolen from real listings. Prices look very cheap.

Warning signs:

• Price is much lower than similar properties
• Agent refuses to meet you or show the property
• You cannot find information about the agent online
• Agent asks for deposit before you view the property
• Listing has spelling mistakes or poor grammar

How to protect yourself: Always view property in person. Verify the agent’s registration with the Property Practitioners Regulatory Authority (PPRA). Never pay deposits to an agent directly.

2. Email Interception Scam

How it works: Criminals intercept emails between you, the estate agent, and the attorney. They monitor the transaction. Just before payment, they send a fake email with new bank details.

Warning signs:

• Email address looks similar but has small differences
• Urgent requests to change bank details
• Different email address suddenly used mid-transaction
• Poor grammar in emails (lawyers usually write well)

How to protect yourself: ALWAYS phone the attorney directly to confirm bank details before making any payment. Use the number on their official website, not from the email. Never trust bank details sent by email alone.

3. AI-Powered Scams (NEW 2024)

How it works: Scammers now use artificial intelligence to create fake property listings with realistic photos. They can even create deepfake videos showing properties or clone voices of real estate agents.

Warning signs:

• Photos look too perfect or computer-generated
• Video tours but you cannot visit in person
• Voice calls sound slightly robotic or unnatural
• Documents have perfect formatting but wrong details

How to protect yourself: Insist on in-person meetings and property viewings. Verify the agent’s identity through their registered office. Trust your instincts if something feels wrong.

4. Fake Government Housing Scam

How it works: Scammers send SMS or WhatsApp messages claiming you are approved for an RDP house. They ask you to pay a registration fee or processing fee.

THE TRUTH: Government housing subsidies and FLISP applications are completely FREE. You never pay any fee to apply or receive government housing.

Warning signs:

• SMS from unknown number claiming you are approved
• Request to pay registration or processing fee
• Pressure to act quickly
• No official government letterhead or reference number

5. Fake Estate Agents

How it works: Criminals pretend to be estate agents. They show you a real property (sometimes the owner shows it without knowing about the scam). They take your deposit and disappear.

How to protect yourself:

• Check agent’s Fidelity Fund Certificate
• Verify registration on PPRA website (www.ppra.org.za)
• Call the estate agency head office directly
• Never pay deposits to an agent – only to the attorney’s trust account

General Safety Rules

✅ Smart Home Buying Tips

Before You Start Looking

• Save money for at least 3 months before applying
• Clean up your credit record
• Pay off small debts to improve your credit score
• Keep your job – don’t change employment during the process
• Keep bank statements clean (no bounced debits)

When House Hunting

• Visit properties during different times of day
• Talk to neighbours about the area
• Check safety and crime statistics
• Consider future needs (starting a family, working from home)
• Think about resale value
• Check quality of schools nearby
• Consider distance to work and transport costs

Saving Money Tips

• Use a bond originator – they compare multiple banks for free
• Negotiate the purchase price
• Try to negotiate attorney fees (they don’t have to charge standard rates)
• Ask about bank promotions (some banks give cash back)
• Consider properties that need minor work (better price)
• Look at properties that have been on market for long (sellers might negotiate)

Choosing Between Property Types

Freestanding house:

• More privacy and space
• You maintain everything yourself
• Usually more expensive
• Better for families

Sectional title (flat/townhouse):

• More affordable
• Security and maintenance included in levies
• Less privacy
• Monthly levies can be high (R500 to R2,000+)
• Good for first-time buyers and young professionals

Important Questions to Ask

• Why is the owner selling?
• What are the monthly rates and taxes?
• How old is the geyser and roof?
• Are there any boundary disputes?
• When was the property last renovated?
• What appliances are included?
• Are there any structural problems?

Where to Get Help

Government Departments

National Housing Finance Corporation (NHFC)
For FLISP/First Home Finance subsidy
Phone: 010 085 2199
Email: info@nhfc.co.za
Website: www.nhfc.co.za

Department of Human Settlements
For housing enquiries
Phone: 0800 146 873
Email: info@dhs.gov.za
Website: www.dhs.gov.za

Regulatory Bodies

Property Practitioners Regulatory Authority (PPRA)
Verify estate agents and report problems
Phone: 010 001 8000
Email: info@ppra.org.za
Website: www.ppra.org.za

Financial Sector Conduct Authority (FSCA)
For complaints about banks and lenders
Phone: 0800 110 443 / 012 428 8000
Email: info@fsca.co.za
Website: www.fsca.co.za

Major Banks Home Loan Departments

Standard Bank: 0860 123 000
ABSA: 0860 008 600
FNB: 087 575 9404
Nedbank: 0860 555 111
Capitec: 0860 102 043

Bond Originators (Free Service)

ooba Home Loans
South Africa’s largest bond originator
Phone: 0861 662 234
Website: www.ooba.co.za

BetterBond
Free home loan comparisons
Phone: 0860 23 88 37
Website: www.betterbond.co.za

Free Credit Reports

TransUnion: www.transunion.co.za
Experian: www.experian.co.za
Compuscan: www.compuscan.co.za

Buying your first home is a big step. Take your time and do not rush. Check your credit score first. Get pre-approved before house hunting so you know your budget.

If you earn between R3,501 and R22,000 per month, apply for the First Home Finance subsidy. This can save you thousands of rands. The application is free – never pay anyone to apply for you.

Always verify bank details by phone before making any payment. Property scams are common. Trust your instincts. If a deal seems too good to be true, it probably is.

Use a bond originator like ooba or BetterBond. They compare banks for free and can save you thousands in interest. Budget for all costs, not just the purchase price.

Keep money saved for emergencies after buying. Home ownership brings unexpected costs. But it also builds your future wealth and gives you security. Good luck with your home buying journey!