Real Estate Investor Magazine South Africa March 2015 | Page 30

ACQUIRING

Housing

Subsidies

FLISP assistance for new homebuyers
BY MEYER DE WAAL AND VERNA PUGIN

M

any new homeowners are unaware that
first-time homebuyers can qualify for a
housing subsidy under the Finance Linked
Individual Subsidy Plan (FLISP) grant.
“If they do not investigate and make use of the
opportunity they may be losing thousands of Rands
by not claiming the FLISP subsidy, and are losing out
on the prospect of reducing their bond repayment and
bond term, and as such losing out on thousands more,”
says Verna Pugin, who conducted an investigation into
FLISP subsidies.
FLISP is initiated by the Government to assist firsttime homeowners in acquiring their own homes. It is
available to all first-time residential homebuyers who
earn between R3 501 – R15 000 per month and whose
home loan has been approved (as a pre-requisite), as
well as new homeowners (who have already taken
transfer). New homebuyers must apply for this
assistance within 12 months of taking ownership.
The minimum FLISP subsidy is R20 000.00 and if
such subsidy is paid into a bond of R500 000.00 as
a ‘once-off ’ payment, the homeowners can save up to
almost R100 000.00 and reduce their bond repayment
from 20 years to almost 18 years, thereby saving two

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March 2015 SA Real Estate Investor

years of the bond repayments.
Similarly, a subsidy of R40 000.00 awarded to a
qualifying homeowner with an income of R11 700.00
who may qualify for a home loan of R400 000.00, may
save more than R170 000.00 on bond repayments, and
reduce the bond repayment term from 20 years to 15
and a half years.

“Few existing homeowners are aware
of this opportunity to claim their
FLISP subsidy.”
The maximum purchase price of R300 000
was removed since 1 April 2014, yet few existing
homeowners are aware of this opportunity to claim
their FLISP subsidy.
The benefit to a bank will be that an additional
payment into a bond account will also reduce the debt
risk for a bank, as it reduces the loan to value ratio. “We
suggest that clients approach their banks to reconsider
and reduce the interest rate that is applicable to a home
loan, once the FLISP subsidy is paid into their home
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