Subsidy Administration
Overview:
This component manages the Housing Subsidy System and provides an efficient and effective beneficiary administration service.
Objectives:
- Process applications for subsidies of individual beneficiaries.
- Register projects and capture project data, project schedules, progress and project budgets and cash flows.
- Process invoices for payment to developers and other housing claims.
- Provide a help desk facility.
What is a Housing Subsidy?
A Government Housing Subsidy is a once off grant by Government to qualifying beneficiaries for housing purposes. The grant is not paid in cash to beneficiaries. The grant is either paid to a seller of a house, or in new developments, the grant is used to construct a house that complies with the minimum technical norms and standards, which is then registered in the name of the beneficiary in the Deeds Office. Housing grants are also used to finance the provision of rental accommodation. Rental housing units are provided by approved housing institutions who also manage and maintain the units.
Do I Qualify for a Housing Subsidy?
Applicants for the Housing Subsidy must satisfy the following qualifying criteria:
• Citizenship: An applicant must be a citizen of the Republic of South Africa, or be in the possession of a Permanent Resident Permit.
• Competent to Contract: An applicant must be legally competent to contract (i.e. over 18 years of age, or married or divorced and of sound mind).
• Not yet benefited from Government Funding: An applicant or his or her spouse may not have received previous housing benefits from the Government. In the event of a divorce involving a person who previously derived benefits, the terms of the divorce order will determine such person’s eligibility for further benefits.
• First time property owner: An applicant or his/her spouse may not have owned and/or currently own a house. Except for the following cases:
• Disabled persons
• Persons who:
• own a vacant stand that was obtained through the Land Restitution Programme;
• have acquired a residential property for the first time without Government assistance.
Community Residential Units
The programme facilitates the provision of secure, stable rental tenure for the lowest income persons who are not able to be accommodated in the formal private rental and social housing market. It also provide a framework for dealing with the many different forms of existing public sector residential accommodation, including hostels redevelopment projects.
Intervention Category: Rural Housing Programme
Definition: Programmes facilitating access to housing opportunities in Rural areas
Rural Subsidy: Informal Land Rights The Rural programme is used to extend the benefits
of the Housing Subsidy Scheme to those individuals living in areas referred to as “rural” areas where they enjoy functional security of tenure as opposed to legal security of tenure. Only individuals whose informal land rights are uncontested and who comply with the qualification criteria will be granted such Rural subsidies
Farm Residents Housing Assistance Programme
The Programme provides capital subsidies for the development of engineering services, should no alternative funding be available, and adequate houses for farm workers and farm occupiers. The farm owner plays a fundamental important role under this Programme. Internal municipal engineering services and raw land may be financed by Provincial Governments, subject to the prescripts below:
Housing Subsidy Amounts
Housing Subsidy Amounts: 11 March 2010 till 31 March 2011
| Subsidy Programme | Subsidy Quantum |
|---|---|
| Integrated Residential Development Programme (IR DP) Subsidies | R0 to R3 500 R55,706.00 |
| Enhanced People’s Housing Process | R0 to R3 500 R55,706.00 |
| Rural subsidies | R0 to R3 500 R54,906.00 |
| Farm Resident Subsidies | R0 to R3 500 R54,650.00 |
| Consolidation Subsidies | R0 to R3 500 R54,906.00 |
| Institutional subsidies | R0 to R3 500 R52,427.00 |
| Individual Subsidies | R0 to R3 500 R84,000.00 |
As an option of last resort, internal municipal engineering services may be financed from the housing subsidy. The amount available per stand is: R22 162,00
The cost of the raw land may be financed from the annual housing funding allocation to Provincial Governments. Market value (Currently estimated at R6 000,00 per stand)
SUBSIDY PROGRAMMES
Integrated Residential Development Programme
The Integrated Residential Development Programme replaced the Project Linked Subsidy Programme. The programme provides for planning and development of integrated housing projects. Projects can be planned and developed in phases and provides for a holistic development orientation.
Phase 1: Land, Services and Township Proclamation
The first phase entails planning, land acquisition, township establishment and the provision of serviced residential and other land use stands to ensure a sustainable integrated community.
Phase 2: Housing Construction: Individual ownership options.
The second phase comprises the house construction phase for qualifying housing subsidy beneficiaries and the sale of stands to non qualifying beneficiaries and to commercial interests etc.
Individual Subsidy Programme
This Programme provides access to state assistance where qualifying households wish to acquire an existing house or a vacant serviced residential stand, linked to a house construction contract through an approved home loan. These properties are available in the normal secondary housing market or have been developed, as part of projects not financed through one of the National Housing Programmes.
Enhanced People’s Housing Process
The Enhanced People’s Housing Process aims to support households who wish to enhance their housing subsidies by building their own homes. The Enhanced People’s Housing Process can be accessed through the Integrated Residential Development Programme, Project Linked Consolidation, Institutional, or Rural Subsidies as well as technical and other forms of assistance in the house building process.
Farm Resident Housing Assistance Programme
The Programme provides capital subsidies for the development of engineering services, should no alternative funding be available, and adequate houses for farm workers and farm occupiers. The farm owner plays an important role under this Programme.
Social Housing Programme
The Social Housing Programme seeks to provide a rental or co-operative housing options for low income persons at a level of scale and built form which requires institutional management and which is to be provided by accredited social housing institutions and in designated restructuring zones.
Enhanced Extended Discount Benefit Programme
The Enhanced Discount Benefit Scheme was introduced to assist persons to acquire state financed rental housing, existing sales debtors to settle the balance on purchase prices of properties acquired from the public sector or to settle publicly financed credit that had been used for housing purposes. This programme applies to state financed properties first occupied before 1 July 1993 and stands or units contracted for by 30 June 1993 and allocated to individuals by 15 March 1994.
The programme entails the discounting of an amount on the selling price/outstanding loan balance of the property. Where the discount amount equals or exceeds the purchase price or loan balance, the property is transferred free of any further capital charges.
Rural Subsidies: Informal Land Rights Programme
The Rural Subsidy Programme is used to extend the benefits of the Housing Subsidy Scheme to those individuals living in areas referred to as “rural” areas where they enjoy functional security of tenure as opposed to legal security of tenure. Only individuals forming part of a community, whose informal rights are uncontested and are therefore unlikely to lose those rights during a land reform process, will be assisted.
The subsidies are only available on a project basis and beneficiaries are supported by implementing agents. Beneficiaries also have the right to decide on how to use their subsidies either for service provision, or building of houses or a combination thereof.
Institutional Subsidy Programme
Institutional subsidies are available to Housing Institutions that provide tenure arrangements alternative to immediate ownership (such as rental, instalment sale, share block or co-operative tenure) to subsidy beneficiaries. The subsidy will enable Housing Institutions to undertake approved projects and to enable them to create affordable housing stock for beneficiaries to live in subsidised residential properties. The rental unit may not be transferred to the beneficiary within the first four years of occupation. A further condition is that the legal entity must in addition to the subsidy, make its own capital investment in the property
Informal Settlement Upgrading Programme
The programme facilitates the structured upgrading of informal settlements. It applies to in situ upgrading of informal settlements as well as where communities are to be relocated for a variety of reasons. The programme entails extensive community consultation and participation, emergency basic services provision, permanent services provision and security of tenure.
Consolidation Subsidy Programme
The consolidation subsidy is available to a beneficiary who has already received assistance through government to acquire a serviced residential site under the pre- 1994 housing schemes. This subsidy is applicable to serviced sites that were obtained on the basis of ownership, leasehold or deed of grant and must be utilised to construct or upgrade a top structure on the relevant property.
