First Time Buyers have been able to save money towards their first home in a Help to Buy ISA since the Scheme began on 1 December 2015. The scheme provides a 25% bonus on savings; with the minimum bonus being £400 and the maximum being £3,000 depending on the balance saved in the ISA.
From 30 November 2019, you will no longer be able to open a Help to Buy ISA. Therefore it is important if you feel you will benefit from the ISA scheme to act now. Even if you are not currently thinking of purchasing a property, it may be beneficial for you to have an ISA open for future use to maximise your deposit towards a new property when you are ready to move.
For First Time Buyers who already have a Help to Buy ISA open there is no need to worry. You will still be able to save in the ISA up until 30 November 2029, and claim the bonus by 1 December 2029.
Am I eligible to open an ISA?
The criteria to open a Help to Buy ISA are that you must:
- be aged 16 or over;
- have a valid National Insurance number;
- be a UK resident; and
- have never owned a property anywhere in the world.
Which bank can I open my ISA with?
There are a wide range of banks offering the Help to Buy ISA scheme. You do not need to use your usual bank.
How does it work?
- In order to open the ISA you will need to deposit the minimum initial payment of £1.00. However, you can input a maximum amount of £1,200 upon opening the ISA.
- You can then input a maximum of £200 a month into the account.
- The Government will then give a 25% bonus on savings between £1,600 to £12,000.
- The minimum government bonus is £400. This means that you need to save £1,600 to receive the minimum bonus.
- The maximum balance you can receive the bonus on is £12,000, meaning you could potentially receive a £3,000 bonus towards your new property.
- When you are in a position to complete on the purchase of your new property, you will need to close the ISA at the bank. They will then provide you with a closing statement showing the balance you have saved.
- You will need to give this to your conveyancing solicitor who will be able to apply for the bonus. The bonus will be deducted from the deposit money due for the property.
- To qualify for the bonus, the property being purchased must have a value no higher than £250,000.00, or £450,000.00 in London.
- If you do decide not to purchase a property you are able to withdraw the monies from the ISA back into your current account with no charge.
Our conveyancing team are experts at dealing with Help to Buy ISAs. Call us today on 0800 988 7756.