Buying your property with a Help to Buy ISA and Government Bonus

The Help to Buy ISA (HTB ISA) was introduced by the government to help first time buyers get on the property ladder. It is a savings account where the government grant a bonus of 25% on top of the amount you save in the ISA, as long as the money is used to buy your first property.

The Help to Buy ISA is available to every first time buyer. For example, if you are buying a property with your partner and you are both first time buyers with separate HTB ISA’s, you can both apply for your individual bonuses. Both bonuses are then used to help purchase your property.

The maximum bonus that be given is £3,000 per person, so if you save £12,000 or more in your HTB ISA, the government will top up your savings by £3,000. There is also a minimum bonus of £400, which means to claim the bonus you must have saved at least £1,600.

What are the requirements for opening a Help to Buy ISA?

• Aged over 16.
• Have a valid National Insurance number.
• Be a UK resident.
• Be a first time buyer.
• Not have another active ISA in the same tax year.

The majority of banks offer HTB ISA, so please contact your preferred bank directly if you wish to open up an account.

Once the account is open, in the first month you can deposit £1,200. After this you can save up to £200 a month until you are ready to purchase your first property.

How do I claim my Help to Buy Bonus?

You can apply for the bonus if the property you are buying:

• Is in the UK.
• Has a purchase price of up to £250,000, or £450,000 in London.
• Is the only home you will own and live in. If you are buying with another person who already owns a property, you can still apply for the bonus as long as you are a first time buyer.
• Is purchased with a mortgage.

You can withdraw funds from your HTB ISA at any time but you cannot apply for the bonus if the money saved is not going towards the purchase of your first property.

If the property meets to requirements listed, the conveyancer you’ve instructed to carry out the legal work will request the bonus. The request is submitted when you are close to completing your purchase and your conveyancer must do the following:

1. Ask you to contact the bank to close the ISA and provide the closing statement issued by the bank.
2. Arrange for you to sign a First Time Buyer declaration, confirming that you do not own any other property.
3. Submit the closing statement, signed declaration and further details about the property to the Help to Buy provider.
4. Receive the bonus and provide you with a financial statement for your purchase. The bonus will be shown on the statement and form part of the funds obtained to complete the purchase.

It is your responsibility to set up the Help to Buy ISA and save for your purchase, but it is your conveyancer’s responsibility to ensure the bonus is obtained at the correct time. As the bonus can only be requested and paid to your conveyancer, it is essential that your conveyancer is aware or the process and when the request is to be made. If the request is made too close to completion or is overlooked, you will lose the bonus you had saved for and are entitled to.