No fringe benefit will arise if an employee acquires a house from their employers at a discount (i.e. at a price below market value) if the following requirements are met:

• The employee does not earn more than R250 000 in salary during the year of assessment in which the acquisition took place
• The market value of the property that is acquired may not exceed R450 000, and
• The employee may not be a connected person in relation to the employer

Interest-free or low interest loans to finance the above stated low cost housing will not be regarded as a fringe benefit if the loan also does not exceed R450 000.