- 20th November 2019
- Posted by: Suzy Hill
- Category: Personal Tax, Business News
Help to Buy ISA closes on 30 November
Time is running out to open a Help to Buy ISA which could add £3,000 to buyers’ first house deposits
The scheme enables people saving for their first home to receive a 25% boost to their savings from the government when they buy a property of £250,000 or less (with a higher price limit of £450,000 in London), and savers can only open one Help to Buy ISA.
Although it is set to close on 30 November, savers can still open the Help to Buy ISA up until midnight on the closing day, and save for their first time buyer bonus until 30 November 2029.
For every £200 saved, first-time buyers can receive a government bonus of £50, however savers are allowed to deposit an extra £1,000 in the first month to get the ball rolling. The maximum government bonus is £3,000 once £12,000 is saved.
The money put into the savings account can also be withdrawn at any time if need be, savers would simply have to wait a little longer to reach the full £12,000 mark depending on how much was withdrawn.
The scheme was launched on 1 December 2015 with accounts available through banks, building societies and credit unions.
To claim the bonus, first-time buyers will need to instruct their solicitor or conveyancer to apply for the government bonus.
Once received, it will be added to the deposit being put towards a first home.
The bonus must be included with the funds consolidated at the completion of the property transaction, it cannot be used for the deposit due at the exchange of contracts, to pay for solicitor’s, estate agent’s fees or any other indirect costs associated with buying a home.
There have been 310,658 bonuses paid through the scheme with an average bonus value of £920, shows the most recent Treasury Help to Buy quarterly statistics on transactions from 1 December 2015 to 31 March 2019.
The quarterly statistics also show that the median age of a first-time buyer in the scheme is 28 compared to a national first-time buyer median age of 30, and the highest number of property completions with the support of the scheme is in the north west and Yorkshire and the Humber, with the lowest number in the north east and Northern Ireland.