The Help to Buy ISA was launched in December 2015 and is a scheme which the government has introduced for first time buyers. The government have stated that too many families are currently renting and as a result have introduced this scheme to allow first time buyers to save enough money for a deposit.
As with normal ISA’s , the Help to Buy ISA is being offered by various banks and building societies – who offer competitive rates of interest – for example Halifax are currently offering a 4% annual rate.
The amount which has been saved will be ‘topped up’ by a government bonus of up to 25%, which totals a maximum of £3,000, at the point of house purchase.
In order to qualify the applicant must be a UK resident, 16 or over and buying a property In the UK for the first time. However, you’re not eligible for this if you wish to buy for the buy-to-let market. Additionally the value of the house must not exceed £250,000 unless the property is in London where the limit is £450,000.
A maximum monthly deposit of £200 is allowed. Once the balance reaches £12,000 then the saver is entitled to government support of the maximum £3,000. A limitation to using such an ISA is an individual is not able to open any additionals ISA’s but are able to continue holding a current one.
The scheme will be closed to new entrants from 30th November 2019.Talk to our legal team
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