Are you a first-time buyer? Would you like £3,000 for free?

Keiran Taylor

Keiran Taylor

Corporate Finance and Banking Specialist

Are you a first-time buyer? Would you like £3,000 for free?

There are many people who already know what a ‘Help to Buy ISA’ is, and some that may even have one, but for those who don’t, there is a deadline looming which you shouldn’t let pass by accidentally.

After 30 November 2019 you will not be able to open any new Help to Buy ISA’s and if you do qualify and don’t open one, that could mean missing out on up to £3k tax-free.

Here are some facts about the help to buy ISA.

  1. The ISA can be used to buy an individual’s (over 16 years old) first house. This CAN be a property that is then rented out if the personal circumstances of the buyer change.
  2. It’s a per person scheme, meaning couples can have one each. Also, if only one of a couple is a first-time buyer then that individual would still qualify for the ISA.
  3. The Government will add a 25%, tax-free bonus to whatever you save in the ISA, up to a max of £3,000, when you use it to buy your first property.
  4. The 25% bonus is claimed by your solicitor at the point of completion. As such the bonus cannot fund the exchange deposit it can only be used to fund the Completion deposit.
  5. It can be used for any UK property costing £250,000 or under (£450,000 in London). It is NOT restricted to New Builds.
  6. The ISA can be transferred between providers but only one ISA per person is permitted, so multiple ISAs with different providers is not allowed.
  7. The ISA can be opened with as little as £1 and then further savings deposited at a later date.
  8. You can save £1,200 in the first month and then £200 per month thereafter. You can keep saving up to November 2029, but the maximum bonus is £3,000, meaning £12,000 of savings.

So to conclude, If you are thinking of buying your first home in the next several years, or know someone who is, you may benefit from opening a Help to Buy ISA before the deadline of 30 November 2019, which can be done with as little as £1.  You can then decide what you want to do with it later on. If you do not open one before the deadline you will miss the chance to benefit from the 25% government bonus.

If you have any queries or would like to discuss further, then please contact us on 0113 257 4506 and ask for Keiran Taylor.

Keiran Taylor

Corporate Finance and Banking Specialist