First-time home buyer guide for South Africa

Banks are required by the National Credit Act to run an affordability assessment before approving any credit agreement, including a bond. They cannot simply lend against your income without checking what you can actually repay. In practice most lenders cap your bond instalment at around 30% of your gross monthly income, and your total debt repayments (bond, car, credit cards, store accounts) at around 36% to 40%, so existing debt reduces what you qualify for even if your income looks comfortable on its own.

What a bank approves and what you should actually take on are not the same number. The bank's calculation does not know about your other monthly commitments that fall outside formal credit (school fees, medical aid, a car you're planning to buy next year), and it does not build in a buffer for rate increases on a variable-rate bond. Get pre-approved before you start viewing, so you know your real ceiling, then shop below it rather than at it. Run your own numbers through our bond and affordability calculators before you make an offer.

This is where most first-time buyers underestimate what buying a home actually costs. The deposit is the number everyone plans around, but it is one of several cash amounts due before or at registration, and none of the others can be financed into the bond.

Often not, but not because they're first-time buyers. South Africa has no separate transfer duty exemption or rebate for first-time buyers. The nil-rate threshold (currently R1 210 000 for the 2026/27 tax year) applies to every buyer, on every purchase, regardless of whether it's their first property or their fifth. It just happens that a large share of first homes fall at or under that threshold, which is why the exemption feels like a first-time-buyer benefit even though it isn't one.

A R1 210 000 purchase attracts no transfer duty at all. Go one rand over the threshold and only the portion above it is taxed, starting at 3%: a R1 500 000 purchase owes R8 700 in transfer duty, calculated on the slice above the threshold, not the full price. See the full transfer duty and transfer cost breakdown for the complete bracket table and worked examples at higher prices.

Yes, as of 2026. The Finance Linked Individual Subsidy Programme was rebranded First Home Finance and is administered by the National Housing Finance Corporation on behalf of the Department of Human Settlements. It remains a once-off, income-scaled subsidy for qualifying first-time buyers: it is not a loan and does not need to be repaid.

Eligibility is narrower than many buyers expect: you need a total household income roughly between R3 501 and R22 000 a month, must be a South African citizen or permanent resident, must never have owned residential property before (checked against the Deeds Registry), and must not have benefited from any other government housing programme. The subsidy amount is scaled to income within that band. Check the current figures on the official application portal before you budget around a specific number, since they are periodically revised.

If your household income sits in that band, apply before you commit to a purchase price. The subsidy can be used toward the deposit or other buying costs, which changes what you need to save. If you earn above R22 000 a month, you don't qualify, and the deposit-and-cash-requirements above apply to you in full.

• Get pre-approved, not just pre-qualified. A bond pre-approval from your bank (or a bond originator working several banks at once) tells you your real ceiling before you view a single property.
• Set your budget below your ceiling, leaving room for the cash costs above the purchase price and a buffer for rate movement if your bond is variable.
• View, and do your own due diligence. Ask for the title deed, the rates account, the municipal-approved building plans, and a written disclosure of known defects if you're buying privately.
• Decide between freehold and sectional title before you make an offer. The ownership form changes what you're responsible for maintaining and what monthly levies you'll carry. See freehold vs sectional title.
• Make a written offer. A sale of land in South Africa is only valid if it is in writing and signed by both parties. See how an offer to purchase works and include suspensive conditions such as bond approval within a set window.
• Confirm your bond within the suspensive-condition period, usually 21 to 30 days, and treat an 'in principle' approval as provisional until the bank issues a formal quotation.
• Let the conveyancer run the transfer. See conveyancing and the transfer process for what happens at each stage, typically two to three months from accepted offer to registration.

• Budgeting only for the deposit and being caught out by transfer duty, attorney's fees and bond registration costs at the same time.
• Treating a bank's maximum approval as the target, rather than a ceiling to stay well under.
• Skipping pre-approval and only discovering the real affordability number after making an offer, then losing the property when the suspensive condition expires.
• Not reading the offer to purchase closely before signing: it is a binding contract the moment both parties sign, not a non-committal expression of interest.
• Assuming sectional title means no maintenance responsibility. You still pay a share of the complex's costs through the monthly levy, on top of your bond.
• Not budgeting for life after transfer: moving costs, immediate repairs, and the first few months of rates, levies and insurance landing all at once.