Help to Buy ISA explained
5 April 2018 by Marion Knocker
If you are over the age of 16 and a first time buyer (someone who does not own and has never owned a property anywhere in the UK or the World), you may be eligible to open a Help to Buy ISA. You must also have a National Insurance number and not have any other active cash ISA in the same tax year.
To qualify for the government bonus the property must have a purchase price up to £250,000 or £450,000 for properties in London. The property must be the only home you own and your main residence. You must also be purchasing with the assistance of a mortgage.
You will be asked to sign a declaration to this effect which is then uploaded on the Government Portal by your acting Conveyancer.
The Government will boost your savings by 25%. The maximum bonus available is £3000. To receive this amount you would need to have savings of £12,000.
The minimum bonus is £400 meaning you need to have saved at least £1600 into your ISA.
Your Conveyancer will obtain your signature(s) to a First Time Buyer Declaration ahead of Exchange of Contracts.
Once the transaction is ready for exchange, your Conveyancer will ask you to close your ISA account and to forward to them the Closing Statement. The Closing Statement contains the information required to claim the bonus on your behalf.
The Closing Statement and First Time Buyer Declaration will be uploaded to the Government portal which will calculate the bonus funds you are due. The Conveyancer will provide the completion date and the date that the funds are required.
Bonus money must be included in the funds for completion of the transaction. You cannot obtain bonus money after completion has taken place nor can it be used as part of your deposit for exchange.
There are a number of providers of the scheme. Details can be found at https://www.helptobuy.gov.uk/help-to-buy-isa/providers-in-the-scheme/
Whether you are a first time buyer or looking to buy a property using an ISA our property team can assist and help guide you through the steps. Call 01206 704043 or email [email protected].