In the March 2015 Budget, the government announced the Help to Buy: ISA. The intention was that first-time buyers who chose to save through a Help to Buy: ISA would receive a government bonus which would be calculated and paid when they bought their first home. This could provide first-time buyers with a maximum bonus of £3,000 on £12,000 of savings.
In the July 2015 Budget, the government announced that the Help to Buy: ISA will be available for first-time buyers to start saving from 1 December 2015. From that date, first-time buyers will be able to open their Help to Buy: ISA account with a one-off deposit of £1,000 and deposit a maximum of £200 per month into their account. The government will top up the sum by 25%, up to a maximum of £3,000.
The government has provided details of the procedure to be followed to obtain the bonus. The procedure is:
- The first-time buyer deposits money in a Help to Buy: ISA account.
- When they are ready to purchase their first home, the first-time buyer closes their account and receives a closing letter from their ISA manager.
- The first-time buyer gives the closing letter to their solicitor.
- Using the letter, the solicitor applies online for the government bonus.
- The bonus is transferred to the solicitor, who completes the purchase of the home using the full bonus amount.
For further advice and information on Help to Buy contact a member of our Residential Property Team at an office near you.
Source: HM Treasury