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Help to Buy ISA’s.

What is a Help to Buy ISA?

When considering buying your first home, save money into a Help to Buy ISA and the Government will boost your savings by 25%. There are a range of Banks and Building Societies that offer such accounts. This “free money” from the government applies to each first time buyer, not a household so if you are looking to buy together, you can both open such an account.

How much can I open the account with?

You can open your account with as much as £1,200.00 and then save up to £200.00 per month.

How much must I have in the account when I want to claim my bonus?

To benefit from the bonus you must have saved at least £1,600 before you can claim the minimum Government bonus of £400.

What is the maximum I can save in the account?

The most you can save is £12,000.00 and the maximum Government bonus you will receive is £3,000.

Can I buy any property and benefit from the bonus?

To qualify for the government bonus, the property you are buying must:

  • Be in the UK
  • Have a price of £250,000 or less (with a  higher price limit of £450,000 in London)
  • Be the only home you will own
  • Be where you intend to live
  • Be purchased with a mortgage

What can I use my bonus money on?

The money saved in your ISA can be used for your deposit however, the bonus (“free money from the Government”) cannot be used for the deposit due at the exchange of contracts, to pay for conveyancer’s, estate agent’s fees or any other indirect costs associated with buying a home.

When do I do to get the bonus money?

Once you are confident that your hours purchase will be taking place (exchanging contracts and fixing in place a moving in date) you should then close down your ISA account. Your Bank or Building Society will then provide you with a Closing Statement which you must supply to your conveyancer. Your conveyancer will then apply for your Bonus funds via the Government Portal before the day your purchase completes.   

What if my purchase doesn’t complete and I’ve closed down my ISA Account?

If your property purchase doesn’t go through after you have closed your Help to Buy: ISA in anticipation of claiming a bonus, you can re-open your Help to Buy: ISA. To do this your conveyancer will give you a document (called a purchase failure notification) confirming your property purchase did not complete. If you take this to your bank or building society they will re-open your account for you. At this point, you will be able to deposit your money as a lump sum. So, if you closed your account with £12,000 in it, you will be able to re-deposit £12,000. If the government bonus has already been transferred, your conveyancer will first need to return your bonus to the Help to Buy: ISA Scheme Administrator before you can receive a purchase failure notice.

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