Four Types Of Subsidies In South African Government

Every responsible government owes a better life to its people. Therefore, with the four types of subsidies in the South African government; one can see the depth of responsibility in the South African government. The Government of South Africa recognizes that for a peaceful and prosperous society to be attained; the government has to take care of its citizens who do not have the means to afford the basic necessities of life.

When the poorest of the country’s poor have the basic necessities of life, they can contribute better to the economy by being productive, and also by participating in the retail economy; thus improving the circulation of money in the country, and pushing all the economic indexes upwards.

Four Types Of Subsidies In South African Government

Individual Subsidy

The Individual Subsidy is a housing subsidy plan through which the government seeks to enable poor individuals to have homes in which they can live with their families. The Individual Subsidy can be the ‘free basic housing’ which is a popular program through which the government provides housing to the poorest in the society; or it could be through the Finance Linked Individual Subsidy Program (FLISP) which provides for the ‘affordable market’ which is South Africans who are too poor to get a mortgage deal, but who earn too much money to qualify for the ‘Free Basic Housing.’

For This Program You Must Be:

A South African citizen or legal permanent resident.

At least 18 years of age.

You must be earning between R3 501 to R22 000 per month.

This must be the first home you are going to acquire.

Consolidation Subsidy

The Consolidation Subsidy is for those who have previously been granted another subsidy (such as the Free Basic Housing or the Finance Linked Individual Subsidy Program), they must already live on the site, but may want to make improvements to their existing property, such as the construction of additional living spaces and so on.

For This Program You Must Be:

A South African citizen or legal permanent resident.

Must have already benefited from a housing subsidy in the past.

You must be living on site at the subsidized house. (This is not for those who see real estate as a business venture)

 Rural Subsidy

Rural subsidy is understandable because even though the greater number of the applications for housing subsidies in South Africa comes from the big cities and townships, the goodwill of the government must not be the exclusive preserve of the few. Therefore, the rural subsidy is for those who don’t have the formal tenure rights to the land on which they live.

Usually these are rural dwellers on land owned by the government. This type of subsidy is available only on a project basis and may be used to build a house, provide services, or both.

Institutional Subsidies

Sometimes you can get better attention from the government when you come together as a group to raise your voices together, and get the government to give you what you need. The Institutional Subsidies is therefore a very good option; one that is available to organizations, including churches, housing associations or local authorities.

With this option; the organization, church or community can raise funding to build the houses which will then be rented out an affordable rates to the workers or members within its group.

Please note that:

To be eligible for this subsidy the group, or the parent organization of the group must be registered with the relevant authorities.

People’s Housing Process Establishment Grants

People’s Housing Process Establishment Grants are subsidies given to people who are made up of organized groups of households or even entire communities who wish to build better quality houses without spending so much money. With this type of housing subsidy, even small rural communities can get a chance to get decent houses to live in, as is their right as South African citizens.

Relocation Assistance

Relocation assistance is a kind of housing subsidy that is designed for people that is designed for people who are already home owners, but who cannot afford to pay, or to keep paying their home loans; perhaps due to changes surrounding their employment or business. This subsidy will help them relocate to a smaller house in a less affluent neigbourhood; that way they would be moving to a more affordable home.

Please Note: you cannot apply for this kind of housing subsidy without first having a mortgage agreement with a bank, mortgage company, or government institution.

Project Linked Subsidy

Project Linked Subsidy is a kind of housing subsidy that is linked to a specific project. There are several housing development projects in South Africa, and the applicant of this subsidy may purchase a house and the land on which it stands in an approved Municipal housing project. This housing subsidy is given directly to the Municipality that is building the housing development; this is a kind of subsidy that can help poor people get housing in very good locations.

Discount Benefit Scheme

Discount Benefit Scheme is one of the four types of subsidies in South African government; and this one promotes home ownership among tenants of State-financed rental stock, including formal housing and serviced sites. This does not include informal housing locations; where the deeds cannot be recorded. With this type of subsidy scheme, the applicants can receive a discount on the selling price of the property.



The four types of subsidies in South African government are designed to afford the poor in the country with the opportunity to have affordable housing. This shows how well planned the South African government is. Individuals, Organizations, Rural dwellers, and Small Towns can all benefit in one way or another from the housing subsidies in South Africa.

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