Help to Buy ISAs explained
The government launched the Help to Buy ISA scheme in late 2015. This provided house-hunters with an advance towards their cash deposit if they met a suitable level of saving.
Here at Versus Law, we frequently aid customers in making the most out of complex legal features by ensuring their loan contracts and paperwork are fit for purpose and precise.
As conveyancing experts, we also provide advice on the best options available to become homeowners, by providing a solution to help customers afford a new home with minimal financial risk.
This is everything you need to know about the Help to Buy ISA scheme:
- What is a Help to Buy ISA?
A Help to Buy ISA is a new type of ISA which is essentially an agreement with the government which provides a return on an individual’s savings with a cash bonus on top of their own input.
When you save up to £200 per month in your Help to Buy ISA account, the government will contribute 25% of everything you save, which works out as a monthly contribution of £50.
If you contribute £1000 when you first open your ISA, you will benefit from a £250 contribution from the government.
- Eligibility for the scheme
This type of ISA is only available to first time buyers who are aged over 16 years old and over.
There is not a certain salary requirement for eligibility. If you are planning on buying your first home and over the age of 16 you can apply for this ISA.
- My partner owns a home. Am I still eligible?
You will still be able to apply for the Help to Buy ISA, with or without your partner. However, they are not eligible for this scheme.
- Is there a limit to the government’s contributions?
Yes. The maximum the government will contribute is £3000. However, to receive this bonus, you would have had to contributed £12,000 yourself.
- What is the minimum I could save to receive any bonus?
The minimum you will have to save to gain the minimum bonus is £1,600. This will in turn earn you £400 from the government.
- How will I receive the government contribution?
The contribution will be calculated and then provided to you in the form of a voucher when you buy your first home. If you then decide you do not want to buy a house, you will not receive the voucher.
- Can I still open a Help to Buy ISA?
Unfortunately, the window to open an ISA was between 1st December 2015 to December 2019. If you didn’t open one during that time, you won’t be able to open one now, as the scheme is no longer being offered to those who didn’t already have a Help to Buy ISA.
- When is my account valid until?
There is no limit to the amount of time you can use your account and pay into it.
- How many ISA’s of this kind can I have?
You are only ever allowed one single account, from one single provider.