Could you cash in with a Help to Buy: ISA?

Could you cash in with a Help to Buy: ISA?

By Published On: 27 June 2019Categories: NewsTags: , , , ,

If you’re looking to purchase your first property, with a Help to Buy: ISA you could get a £3000 bonus from the government to put towards the purchase. But you better act quickly as you haven’t got long left as on the 30th November 2019 the Help to Buy: ISA will be replaced with the Lifetime ISA.

What is a Help to Buy ISA?

The Help to Buy: ISA was launched in 2015 and it is intended to help first-time buyers save money for their first home. If you’re a first-time buyer, the benefit of saving into a Help to Buy: ISA is that the government will boost your savings by an impressive 25%. This is a welcome addition for anyone who is desperate to own their first home!

If want to help your adult children or grandchildren onto the property market you can contribute to their ISA. Anyone interested in opening a Help to Buy: ISA must 16+ and 18+ for a Lifetime ISA.

Opening a Help to Buy: ISA is relatively straight forward, and they are available from a range of banks, building societies and credit unions. The ISA is available to every first-time buyer, so if you are buying your first home with a partner you can both open an ISA and potentially benefit from a combined £6000 bonus.

The ISA can be used to buy a property up to the value of £250,000 or up to £450,000 for homes in London.

How the ISA works

Basically, for every £200 you save the government will contribute £50. You are entitled to save up to £200 per month into the ISA.

Piggy bank ISA saving

You can open the ISA with just £1 and add more money as it becomes available. Or, you can deposit a maximum of £1200 into the ISA to get you started.

The minimum bonus the government will pay out is £400, meaning you have to save £1600 into the ISA. The maximum the government will pay out is £3000 on savings of £12000.

When you are getting close to buying your chosen property, instruct your solicitor or conveyancer to apply for the government bonus. Upon receiving the money, it will be added to the money you are saving for your property. The bonus money can be used for a mortgage deposit, but it can’t be used for a deposit which is due at exchange, to pay for solicitor’s fees or estate agents fees.

Act quickly as time is ticking on

The latest date you can open a Help to Buy: ISA is 30 November 2019. After this it will be replaced with a Lifetime ISA (LISA for short).

As well having a deadline for applying a Help to Buy: ISA, you’ve only got until 30 November 2029 to apply for the bonus. So, if you want to receive the maximum £3000 bonus you’ve got 10 years to save £12,000.

If you’re a contractor who is planning to purchase your first home or if you’re looking to help a child or grandchild get onto the housing market, speak to our expert team for further information on the Help to Buy: ISA. Speak to one of our Directors on 01962 820375 or send us a message via our website and we’ll be in touch shortly.

Note: All the information and advice in this blog post was correct at the time of writing.

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