Help to Buy ISA
To help first time buyers get on to the housing ladder, the government introduced a new form of ISA from Autumn 2015 called the Help to Buy ISA. It had all the tax advantages of a cash ISA but also topped up by the government by up to an additional £3,000. It was designed to help first time buyers save enough to put down a deposit for their first home.
Help to Buy ISAs are now closed to new applicants
The Help to Buy ISA were available through banks and building societies. First time buyers that save through a Help to Buy ISA receive a government bonus to help encourage them to save.
How does it work?
The saver opens up a Help to Buy ISA (H2BISA) at a bank or building society. You will need to be over 16, have your National Insurance No. and be a first time buyer. You can only open one H2BISA and the saver can save a maximum of £200 per month into the H2BISA. The government will increase this by 25% when the saver buys their first house.
You can deposit a lump sum of up to £1,200 into the account as you open the account. The maximum amount that can be saved under the H2BISA is £12,000. The government will top this up by 25% of the amount saved, to a maximum of £3,000 to bring the total saved to £15,000.
The bonus is paid when the saver commits to buying a property as their main residence (not buy to let). The bonus is subject to a minimum claim of £400 (requiring a minimum of £1,600 of savings).
The amount saved can help pay the deposit on a house up to the value of £250k outside London and £450k in London.
It is intended that H2BISA accounts will be limited to one per person not one per household, so a couple could put two H2BISAs together to buy a home.
Once an account is opened there is no limit on how long a person can save into a H2BISA and no time limit on when they can use their government bonus.
For further information see https://www.gov.uk/government/publications/help-to-buy-isa
Contains public sector information licensed under the Open Government Licence v3.0.
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