help to buy isaThe Help to Buy ISA (Individual Savings Account) is an ISA designed to help first time buyers get onto the property ladder by allowing them to save up to £200 a month into the ISA, with the promise that once you purchase a property (worth up to £450,000 in London, and £250,000 outside the capital) the government will increase your ISA savings by 25 percent, up to a total of £3,000.

This means if you save a total of £12,000 into your Help to Buy ISA, the government will top this up by the full £3,000 to give you a total of £15,000. You may make an initial deposit of £1,000 into your individual account, with your deposit also qualifying for a 25 percent government boost.

It should be noted that the Help to Buy ISA is only available to individuals 16 years old and above, and it’s only payable to those purchasing a property within the UK. Purchases of overseas properties do not qualify under the scheme. The Help to Buy ISA cannot be used if the property is to be rented (let) out.

Couples’ Advantage

One thing which makes the Help to Buy ISA especially tempting to couples and partners, married or not, is that they’re available on a one per person basis, rather than a one per home basis. This means that you and your spouse can both pay into your own Help to Buy ISA, saving a total of £24,000 between the two accounts, and receiving a total of £6,000 from the government.

This applies not just to romantically involved individuals, but also to friends and family members who are purchasing a home together.

When’s it Available, and for How Long

The Help to Buy ISA is available through banks and building societies across the UK from this Autumn (2015). New accounts will only be available for four years, but once you’ve opened an account there’s no limit on how long it can be held.

In terms of the ISA itself there is no minimum monthly deposit, but your bonus can only be collected (upon purchase of a home) once your qualifying savings reach the minimum amount of £400, meaning you have saved a total of £1,600, with the government topping this up to £2,000.

Under the scheme’s rules of saving a maximum of just £200 a month, it will take you just over four and a half years to qualify for the maximum bonus of £3,000, should you wish for it. If you and your partner, friend, or family member also have a Help to Buy ISA you may choose to ‘cash in’ sooner.

Experienced Personal Accountants

To speak with a professional accountant to discuss the Help to Buy ISA, and whether it’s a good scheme for you to partake in, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no-obligation meeting.