HELP TO BUY ISA AVAILABLE FOR FIRST TIME BUYERS!
In the March 2015 Budget the government announced a new ISA savings scheme to help first time buyers (FTBs) save for a deposit to purchase their first new home.
Under this scheme a FTB can save up to £200 a month towards a deposit for their first new home in a Help to Buy ISA account. There is no minimum monthly requirement.
The government will add a bonus of 25% to the FTB’s savings (and any interest earned on those savings) on the purchase of a first home. The bonus is subject to a maximum of £3,000. So if you are a FTB and you save £12,000 the government will pay you a bonus of £3,000.
Accounts are limited to one per person rather than per home so joint buyers can each open Help to Buy ISA accounts.
The accounts will operate in the same way as existing ISAs, with interest accruing on a tax free basis, but will include some special features which are summarised in the document produced by the government.
The Help to Buy ISA accounts will be available from autumn this year and will be available for four years. Once opened there is no limit on the length of time the ISA is used.
A FTB can make an initial deposit of £1,000 when opening the account to allow FTBs to start saving before the accounts are introduced.
Full details of the scheme are in the guidance but scheme features include:
- the saver must be 16 or over and must be a FTB
- the bonus is available to FTBs purchasing UK properties
- only one Help to Buy ISA can be opened per person during the lifetime of the scheme (but usual ISA transfer rules will apply)
- a minimum bonus of £400 per person will be paid
- a maximum bonus of £3,000 per person will be paid
- the bonus is tax free and can be claimed at any time but will only be paid on the purchase of the first home
- the bonus will be available on home purchases of up to £450,000 in London and up to £250,000 outside London
- the bonus can only be used towards a property that is being used for the FTB’s only residence and cannot be used for buy-to-let purchases
- the bonus will be calculated on savings plus interest accrued
- the scheme can be combined with other “Help to Buy” products
30th November 2018Back to news