The new Help to Buy ISA scheme officially launches on 1st December 2015 and George Osborne has revealed the steps that first time buyers need to take in order to claim their government bonus:
- First time buyers will receive a closing letter from their ISA manager when they close their account, which needs to be given to their solicitor.
- The solicitor will then apply online for the bonus and complete the purchase of the home using the full bonus amount.
- The bonus has to be applied for within 12 months of account closure. However, the account can be re-opened with the full amount if a home purchase does not go through after a solicitor or conveyancer has received the government bonus.
Summary of how the scheme works:
First time buyers saving for a deposit will be able to save up to £200 a month in their ISA account. The government will top this up by 25% – a maximum of £3,000.
Savers will also be able to open their account with a maximum £1,000 lump sum, in addition to the £200 monthly maximum. Additionally, couples buying together will be able to combine their bonuses and therefore boost their savings by up to £6,000.
The Help to Buy ISA can be used with any mortgage – it does not have to be used with a Help to Buy mortgage. However, it must be a residential mortgage, not buy-to-let.
The bonus will only be available on homes worth up to £250,000, or £450,000 in London, and you aren’t restricted to buying a new build.
Barclays, Lloyds Banking Group, Nationwide, NatWest, Santander and Virgin Money will be offering Help to Buy ISAs from 1st December 2015.
For further advice regarding the Help to Buy ISA scheme, please contact a member of our Wealth Management team on 0191 285 0321.
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