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The Help to Buy ISA – Financial help for first-time buyers

Maureen Ross

The Help to Buy ISA was announced by the Government in the March 2015 Budget. The idea was that first-time buyers could save through a Help to Buy ISA and, as an incentive, would receive a Government bonus which would be calculated and paid when they bought their first home.

A maximum bonus of £3,000 was on offer to those managing to save the maximum of £12,000 under the scheme.

Paying into a Help to Buy ISA

From 1st December 2015, first-time buyers have been able to open their Help to Buy ISA account with a one-off deposit of £1,000. After the initial deposit, a maximum of £200 per month can be paid into the account. The Government will top-up the total savings by 25%, up to a maximum of £3,000, once you have found a property to purchase and the ISA has been closed.

Claiming the Government bonus on a Help to Buy ISA

In order to claim a bonus on savings in a Help to Buy ISA, there are certain requirements which need to be satisfied:

  • You must be a first-time buyer
  • The property must be purchased with a mortgage and must be in the UK.
  • The property value must be £450,000 or less in London and £250,000 in the rest of the UK.
  • You can only use a Help to Buy ISA for a property which will be your main home (not a buy-to-let property).
 

There are also procedures which have to be followed to obtain the bonus, including finding a Solicitor or conveyancer who has been previously approved to receive the bonus from the Government, on your behalf.

Help to Buy ISA FAQs

 

Q: Can my partner and I both have a Help to Buy ISA?

A: Yes. A Help to Buy ISA is available to each first-time buyer, therefore two people buying together can both benefit from a Government bonus on their ISA.

 

Q: How long do I have to wait before I can claim the Government bonus?

A: The minimum bonus which will be paid is £400, so you will need to have at least £1,600 in your Help to Buy ISA before you can claim the bonus.

 

Q: Can I keep my existing Cash ISA and open a Help to Buy ISA?

A: No. You cannot open a Help to Buy ISA if you already have a cash ISA. You can only pay into one ISA per year. However, some providers do offer cash ISAs and Help to Buy ISAs together in one wrapper.

 

Q: Can I open a Help to Buy ISA even if I don’t want to claim the bonus?

A: Yes. Many providers are offering higher interest rates on Help to Buy ISAs due to the maximum of £200 which can be paid in each month. There is no necessity to claim the bonus if you have a Help to Buy ISA. You can open and use it as any other cash ISA if that’s what you want to do.

First-time Buyer?

For more helpful information on being a first-time buyer, read our “Guide for First Time Buyers” article here.

How we can help

If you have any questions about the Help to Buy ISA or as a first-time buyer please feel free to get in touch. W Davies has already been approved to receive the Government Help to Buy ISA bonus and we would be happy to help you with the legal aspects of buying your first home.

Please contact Maureen Ross, one of our conveyancers in our property department at mzr@wdavies.com for more details or call 01483 744900 to make an appointment with one of our conveyancing solicitors in Woking.

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