Everything you need to know about Help to Buy ISAs

June 26, 2017

In late 2015, the government launched the Help to Buy ISA scheme, which will provide house-hunters with a boost toward their cash deposit if they are able to meet a suitable level of saving.

As experts in residential conveyancing, we regularly help clients to make the most of the complex legal aspects of Help to Buy and ensure that their loan agreements and paperwork are suitable and accurate. We also provide advice on the best options available to would-be home-owners looking for a solution to help them to afford a new home with the minimum financial risk.

Everything you need to know about Help to Buy ISAs

What is a Help to Buy ISA?

This all new type of ISA is an agreement with the government which rewards savers with a cash bonus on top of their own contributions. Save up to £200 per month with a Help to Buy ISA and the government will contribute a further 25% of everything you save, that’s a monthly contribution of up to £50.

You can also contribute a further £1,000 when you open your Help to Buy ISA and benefit from a £300 contribution to get you started.

Am I eligible for the scheme?

The Help to Buy ISA is only available to first time buyers, aged 16 or over. There is no specific salary requirement for eligibility. If you are old enough, and buying your first home, you can apply for an ISA.

What if my partner has already owned a home?

You can still apply for a Help to Buy ISA, with your partner or individually. They, however, will not be eligible.

Is there a limit to what the government will contribute?

Yes. The government will contribute a maximum of £3,000. But bear in mind that you will have to contribute £12,000 to receive that bonus.

What is the minimum I could save?

The minimum you will need to spend to gain a bonus is £1,600, which will earn you a £400 contribution from the government.

How will the government bonus be paid?

The bonus will be calculated and provided, in the form of a voucher, upon the purchase of your first home. If you do not buy a home, you will not receive a voucher.

When can I open my Help to Buy ISA?

You can open your account from 1 December 2015, or any time thereafter until December 2019.

When can I have my account until?

There is no limit to the amount of time you can use your account and pay into it.

How many Help to Buy ISAs can I have?

Unlike other ISAs, you are only allowed a single account, from a single provider.

Where can I get one?

Help to Buy ISAs are available from all banks and building societies, and interest rates will differ from one to the next. The bonus will remain the same, but the amount the bank contributes in increments will differ from one to the next.

We provide expert legal advice to a wide array of individuals who are looking to take advantage of the Help to Buy scheme to get a mortgage on a new property. Would-be homeowners can also to take advantage of a Help to Buy ISA to get on the ladder, but depending on their circumstances, there could be a catch.

The Help to Buy ISA scheme, launched in December 2015 represents a new kind of cash boost for house-seekers. The new ISA works by rewarding individuals who are willing to save toward a property. Save up to £200 per month toward a home and the government will add another 25% to the amount you save. That could be as much as £50 per month towards your deposit.

You’ll need to save a minimum of £1,600 to qualify, which means the government would be entitled to contribute £400. Save more and the government’s contribution will increase, up to a maximum of £3,000.

So is there a catch with Help to Buy ISAs?

Individuals cannot contribute to a Help to Buy ISA in the same tax year that they contribute anything to another cash ISA.
We can provide advice and expertise on all aspects of  Residential Conveyancing law, so contact us today to find out more about the Help to Buy scheme, Help to Buy ISA’s and the many ways that we can help you with contracts, loan agreements and much more.

The information provided in all of our blogs reflects only a narrative of some elements to consider on the topic. The blogs do not contain considered legal advice and should not be relied upon as advice. Please see our website terms and conditions for full details of our disclaimer. If you are interested in obtaining advice, please contact one of our lawyers who will be happy and able to advise you on your own particular circumstances.