Wed 25 Nov 2015
So How does it work?
If you are saving to buy your first home, save money into a Help to Buy: ISA and the government will boost your savings by 25%. So, for every £200 you save, receive a government bonus of £50. The maximum government bonus you can receive is £3,000.
Open: The Help to Buy: ISA will be available from a range of banks and building societies.
The accounts are available to each first time buyer, not each household. This means that if you are planning to buy with your partner, for example, you could receive a government bonus of up to £6,000 towards your first home.
Save: Save up to £200 a month into your Help to Buy: ISA. To kick start your account, in your first month, you can deposit a lump sum of up to £1,200.
The minimum government bonus is £400, meaning that you need to have saved at least £1,600 into your Help to Buy: ISA before you can claim your bonus. The maximum government bonus you can receive is £3,000 – to receive that, you need to have saved £12,000.
Receive bonus: When you buy your first home, your solicitor or conveyancer will apply for your government bonus. Once they receive the government bonus, it will be added to the money you are putting towards your first home.
Richard Lester, Independent Mortgage Advisor says “This is a real sign the Government wants people to get on the ladder. My advice to first time buyers working hard to save for a deposit would be to seriously consider opening a Help To Buy ISA.”
Here’s the nitty gritty (although it’s fairly straight forward):
• You need to be aged 16 or over, have a valid National Insurance number and have never owned/currently own a property inside or outside the UK.
• The benefits are doubled if first time buyers are purchasing together. Between two people saving £24,000 (a maximum of £12,000 per person) they will receive a £6,000 bonus. That will go a long way to helping with the deposits needed.
• The purchase price of the property must be under £250,000 (or under £450,000 in London) and you’re not restricted to a new build.
• It can be used with most mortgages although not buy-to-let. There will be compliance checks on withdrawal of funds to ensure they are being used for an eligible property purchase.
• You can’t have another active cash ISA in the same tax year (further details can be found on the Help To Buy website.)
• You can withdraw the money (without the bonus) should you decide not to buy a home with the money.
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