The Help to Buy ISA
The Help to Buy ISA is a government scheme to help first time buyers get onto the property ladder. The scheme is open individuals aged 16 and over who are saving up to purchase their first home. To be eligible for a help to buy ISA you must:-
- be a UK Resident
- have a valid national insurance number
- be a first time buyer, and not own a property anywhere in the world
- not have another active cash ISA in the same tax year
In addition, to be able to claim the Help to Buy bonus from the government, the property you are purchasing needs to be located in the UK and cost no more than £250,000 (or no more than £450,000 in London). You must also be intending to occupy the property as your only and main residence.
You can open a Help to Buy Isa with most banks and building societies. You are able to deposit up to £1,200 in the first month of opening your ISA and then £200 per month thereafter. If you are buying your first home with another person you can both use your help to buy bonuses towards the purchase price of the property. If the person you are purchasing with is not a first-time buyer, you can still use your bonus towards the purchase price.
The scheme works as follows:-
The Government will pay a bonus of 25% on the money you have deposited into the ISA. The Minimum amount required to be deposited into your ISA is £1,600.00 The maximum you can save is £12,000.
E.g If you deposit £2,000.00 into your Help to Buy ISA, the government will pay a 25% bonus in the sum of £500.00 which will be used towards the purchase price of the property.
After you have finished saving for and finding your property you will need to instruct a solicitor. The solicitor will instruct you as to when to close the ISA account. To do this you will need to attend the bank and request a help to buy ISA Closing Statement and give the statement to your solicitor. Your Solicitor will then apply for the bonus once a completion date has been agreed. The government agency will pay the bonus directly to your solicitor prior to the completion date.
Help to Buy ISAs will only be available until 30th November 2019. After this date, no new accounts will be opened however existing account holders will still be able to qualify for their bonus.
If you are looking to purchase your first home with the assistance of a Help to Buy ISA, please do not hesitate to contact our Conveyancing department on 01472 245555.
