For first time buyers
Today marks the launch of the new Help-to-Buy ISA, the latest government initiative designed to help tackle the issue with a lack of property ownership. The government sees the crisis of too many families forced to rent due to being unable to raise the necessary deposits required. Who qualifies? And what’s the deal?
What is the Help-to-Buy ISA?
The Help-to-Buy ISA is simply a specific savings account for first-time buyers to save for a deposit on their first home.
It is structured as an ISA, making interest earned tax-free.
These ISA’s are similar to regular ISA’s offered by banks and building societies who will compete with each other by offering better rates of interest to win the customer’s business.
However, with a Help-to-Buy ISA, the government will add an additional 25% on top of whatever is saved, up to a maximum of £3,000 per property purchase.
Who qualifies?
The applicant must be:
- Over 16 years old
- UK resident
- First-time buyer
The property must be:
- In the UK
- Not valued at over £250,000 or £450,000 for London
- For the buy-to-let market
How does the Help-to-Buy ISA work?
Any first-time buyer, or potential first-time buyer, can open a Help-to-Buy ISA. They can only open one and they will also be prevented from opening additional ISA’s, although existing ISA’s can remain open.
There is the opportunity to invest an initial £1,000 to get the ISA going, after that there is a limit of £200 per month investment.
At the point when the ISA reaches £12,000, it will become eligible for the £3,000 maximum government injection, which the solicitor will apply for as part of the house purchase transaction.
Read more – How the Help-to-Buy ISA could affect house price and mortgage rate
Couples saving for a house together, can save separately, with an ISA each, and therefore receive up to £6,000 from the scheme.
If you are interested in Help-to-Buy ISA’s, we can help you choose the best one from a range of options. Call to speak with Darren today and get started in saving for your future.