Help to Buy ISA'a
06 January 2016
At the end of 2015, the government launched their new Help to Buy ISA, a new type of savings account aimed at helping people who are looking to buy their first home.
• What is the Help to Buy ISA?
This is a savings account for first time buyers looking to save money for a house. The government has made a promise to top up the savings in the account by 25% up to the value of £3,000. So for every £200 you save, the government will give you £50.
• Who is eligible for a Help to Buy ISA?
You need to be over the age of 16, have never bought a house before and be actively saving to buy a house for your personal use in the UK (not to rent it out and not for overseas pproperty).
The home you purchase must be worth under £250,000 (or under £450,000 in London).
You also can not have more than one Help to Buy ISA, and you can’t open a Help to Buy ISA and a normal Cash ISA in the same tax year.
• How much are you able to save?
Savers can deposit up to £1,000 initially and pay in £200 monthly, with the Government then adding 25% to the total when the money is used to buy a house. The minimum pay-out is £400, meaning you need to have saved £1,600, and the maximum is £3,000, requiring total savings of £12,000
• Can both myself & my partner get an account?
Accounts are limited to one per person rather than one per household, so those buying together can open one account each and receive a bonus to pay for the same house.
• How long are the ISAs available until?
Help to Buy ISAs are available from the 1st December 2015 to the 30th November 2019. After that date they will no longer be available to new savers, but if you opened your account before that date, you can continue to save into it. Bonuses will have to be claimed by the 1st December 2030.
Help to Buy ISAs are a great way for people to get that little bit of extra help on the way to buying a home of their own. The 25% bonus received is much higher than any interest you would earn on a Cash ISA (based on todays savings rates).
If you would like any information or guidance on any part of the process of saving for and buying a house, please contact us by email or phone and we can help you through the process.
T: 02380 018109
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