By Claire Fountain
If you qualify you can use a Help to Buy ISA to obtain a bonus towards the capital cost of the purchase of a property. The Government will top up your savings by 25%. So for every £200 you save, the Government will contribute £50 but the maximum bonus is £3,000 (with savings of £12,000) and the minimum bonus is £400 (with savings of £1,600).
Help to Buy ISAs are available to each first-time buyer, not each house, so if you're buying a property with your partner, for example, you'll be able to get up to £6,000 towards your deposit. Only one ISA per person can be used.
There are other rules. You cannot obtain a bonus for a buy-to-let property or overseas property.
- You need to be a first-time buyer
- You must be aged 16 or over
- You can use it to buy any home worth under £250,000 (or under £450,000 in London)
- You can use a Help to Buy ISA with any mortgage
How do you obtain the bonus?
A solicitor registered to administer the scheme has to apply for the bonus. Near to the completion of your purchase, you will close your ISA account and provide a final statement confirming the closing balance to your solicitors. You will sign a declaration confirming you qualify for the bonus.
The solicitor will then confirm the timeframe for exchange and completion and apply for the bonus to be paid. The Government pays the bonus to the solicitors upon approval of this request - 5 days' notice is usually required.
For how long is this scheme available?
ISA accounts for the scheme are to be available until 30 November 2019. After that date, the Help to Buy ISA will not be available to new savers. If you open an account before then, you can keep saving until 30 November 2029. A bonus has to be claimed by 1 December 2030.
The residential property team at TWM are registered with the Help to Buy administration portal in order to process bonus requests.
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