Help to Buy ISA (now closed for new applications)
Help to Buy Schemes - Help to Buy: ISA
The closing date for opening a Help to Buy ISA is 30 November 2019. After that date they will no longer be available for new savers.
If you open your Help to Buy ISA before that date you will be able to continue contributing to the scheme until 30th November 2029. The latest you can claim your bonus is 12 months later on 1st December 2030.
How Does a Help to Buy ISA Work?
Buying a house is expensive, and it can be difficult for First Time Buyers to save enough for a deposit. To help people get onto the property ladder the government has developed a savings account that can help you. The Government’s Help to Buy: ISA allows you to save tax free into an account that will boost your savings by 25%. The catch being that the money can only be used for a deposit against a new build property.
If you save into a Help to Buy: ISA for every £200 you deposit, the government will add £50. The maximum the government will contribute is £3,000. In order to reach the maximum bonus available, you would need to deposit £12,000 in your Help to Buy: ISA.
The Help to Buy: ISA can only contribute to properties up to a maximum value of £250k (£450k in London). Our in-house mortgage advisers can assist you in finding out what you can borrow.
What if want / need a deposit higher than £15k?
The good news about the Help to Buy: ISA is that they are available for each first time buyer, meaning not per household. If you are buying with a partner on a joint mortgage you could have two Help to Buy: ISAs contributing toward a single deposit.
How to Apply for Help to Buy: ISA
A number of UK banks operate these ISAs. Speak to one of our advisers who can help. Alternatively you can visit the Government Help to Buy pages to access this information https://www.helptobuy.gov.uk/h... get your Help to Buy ISA up and running, you can place an initial deposit up to £1,200 when you open the account. After the opening deposit has been made, maximum you can deposit is £200 a month. This means that it would take 54 months of regular saving in order to reach the government maximum bonus of £3,000 pounds.
In order to receive a contribution from the government you must save a minimum balance of £1,600 into the Help to Buy: ISA. The minimum contribution the government will pay out is £400 (25% of £1,600).
How to Collect Your Help to Buy: ISA Government Bonus
As the purchase date for buying your new home approaches you will instruct your solicitor or conveyancer to apply for the government bonus. Once they receive the money, they will add it to the funds that you are putting toward your first home.
Note: The government bonus can only be used at the completion of the property transaction. It cannot be used for a deposit at exchange of contracts; nor can it be used to pay any other fees or costs associated with buying a property.
Do I qualify for a Help to Buy: ISA?
In order to apply for a Help to Buy: ISA you must:
- Be aged 16 years or older
- Be a first time buyer, and not own any other property anywhere (including the rest of the world)
- Be a UK Resident
- Have a valid National Insurance Number
- Not have another cash ISA in the same tax year. (Any cash ISA you have open will need to be closed before you open a Help to Buy: ISA. However, you can transfer up to £1,200 from your Cash ISA into the Help to Buy ISA when you close your account.
See government help to buy website for more details. Note: the interest rates on a Cash ISA will be much lower than the 25% contribution the government will provide in a Help to Buy ISA.
In order to claim your bonus your purchase property must:
- Be in the United Kingdom
- Be your sole place of residence
- Be the only property you will own
- Have a purchase price no more than £250,000 (or up to £450,000 in London)
- Be purchased with a mortgage