Help to Buy ISA – What is it?

There has been some confusion recently over the government’s Help to Buy ISA. Isobel Rhodes, Associate Solicitor at Spire Solicitors LLP, explains how it works. isobel-rhodes-Spire-Solicitors-2015

Q. I am buying my first home and I have heard that if I start saving for my deposit in a Help to Buy ISA the government will give me some money to help with the purchase. Is that right?

A. Yes, if you meet the criteria the government will pay you a bonus equivalent to 25% of the amount you have saved in your ISA (minimum of £400 and maximum of £3000) when you close the account and apply the money towards the purchase of a home costing no more than £250,000 (£450,000 within London).

Q. What are the criteria to qualify for the bonus?

A. You must be a resident in the UK for tax purposes (or married to someone who is), you must not own or ever have owned, any dwelling either in the UK or elsewhere in the world bought on your own or jointly with anyone else or have a right to possess or occupy any such dwelling, you must not have received a Help to Buy ISA bonus previously, and you must intend to live in the property you are now buying as your only or main residence.

Q. How do I get the bonus money to my solicitor acting for my purchase?

A. Your solicitor will submit an application giving details of the property you are buying. You will need to provide your solicitor with the ISA closing statement and sign a declaration to confirm you meet the criteria above. If approved, the government will send the bonus directly to your solicitor just before completion so the money can be used towards the balance of the purchase price required to complete. You must still provide the deposit money to enable your solicitor to exchange contracts though as the bonus cannot be used for this.