Buying your first home should be exciting, yet the prospect of saving enough money for a deposit can often be daunting. To help fund a property purchase, the government have introduced several schemes to assist first time buyers.
Help to Buy ISA
The Help to Buy ISA (Individual Savings Account) will give a boost to those struggling to save a deposit. Under this scheme, you can put up to £200 into a designated account each month and the Government will then top this sum up by 25%. This means £50 for every £200 saved.
There is also the option of paying in an initial one-off lump sum of £1,000 to get the account started. If you manage to save £200 a month for five years – giving a total of £12,000 – you will get the maximum bonus from the Government of £3,000.
Whilst you are no longer able to open a new Help to You ISA, you can pay into an existing ISA until November 2029 and claim the 25% bonus until November 2030.
Stamp Duty Land Tax
As buying a home is expensive, the government have assisted first time buyers with a Stamp Duty Land Tax (SDLT) relief. First time buyers purchasing their first home for £300,000 or less will pay no SDLT. Where the purchase price is over £300,000 but does not exceed £500,000, they will pay 5% on the amount above £300,000.
Lifetime ISA
A lifetime ISA can be opened by anyone between 18 and 39. You can save up to £4,000 a year towards your first home and the government will add a cash bonus of up to £1,000 a year on top.
To get the bonus you will need to buy a property that is under £450,000 with a residential mortgage. You can also use the Lifetime ISA along with other Government Schemes such as Shared Ownership. You will need to have had the Lifetime ISA open for at least 12 months before being about to use it towards your first home.
Forces Loans
The Forces Help to Buy Scheme is an enduring policy available to all service personnel. If you are in the UK Armed Forces, this government scheme is an interest-free loan of up to 50% of your annual salary (up to 25,000) to help pay for a new build home.
You can use the Forces Help to Buy Loan alongside Share Ownership Schemes. If you and your partner are both in the Armed forces, you can each use a Forces Help to Buy loan to buy a property together.
First Home Schemes
If you are first time buyers who is buying a new build property built by a developer offering the scheme or a second hand property from an individual who previously purchased a property under the scheme, you may be able to buy a home for 30% to 50% less than its market value.
Eligibility is dependent on being a first time buyer, being over 18, able to get a mortgage for at least 50% of the purchase price, not earning a gross salary of more than £80,000 per year and satisfying the local eligibility criteria imposed by some local authorities.
Our specialist New Build property solicitors can advise you on which government schemes are applicable to your circumstances.
