The incident occurred at about 01:00 on Sunday, police spokesperson Sergeant Nonhlanhla Kgosana said.
She said the owner of the house was playing dice games with a group of other men in his yard when two men came in and tried to use his yard as a shortcut to a next door house.
A heated argument started between the house owner and one of the passers-by over why the two were using his yard as a shortcut.
During the confrontation the two men started fighting and the passer-by drew a knife and stabbed the yard owner once on the chest before he fled.
The injured man was rushed to KwaMhlanga Hospital in a serious condition and was certified dead on arrival.
The suspect was arrested at about 08:00 on Sunday near Thokoza Village.
He would face a charge of murder in the KwaMhlanga Magistrate's Court on Monday.