Wednesday, 13 November 2019

There’s still time to get ‘Help to Buy’ ISA

There’s still time to get ‘Help to Buy’ ISA

SATURDAY, November 30 will be the last opportunity to open a Help to Buy ISA account.

This government scheme is designed to help first-time buyers get on the property ladder.

This is how it works. A person over the age of 16 opens a Help to Buy Isa in a bank or building society, and uses it to save money for a deposit on a house or flat.

Interest of up to 2.58 per cent earned on the money saved is tax-free, and savings between £1,600 and £12,000 can be topped up by a government bonus of 25 per cent.

So for example, a savings pot of £12,000 would be eligible for the maximum government bonus of £3,000 if the money is used to buy a property.

But there is only one month left to apply to take part.

Applicants can save up to £1,200 in the first month, and £200 per month after that — and the property purchased must cost no more than £250,000 — or £450,000 in London.

The Help to Buy Isa is an individual account, so if two people are buying a property together they are both eligible for the bonus — potentially yielding up to £6,000 towards the cost of their home.

The homebuyer’s solicitor applies for the extra cash. Savers can withdraw their money if they decide not to buy a home with it, but will not therefore be eligible for the government bonus. If a Help to Buy Isa is opened before November 30, the money saved will be eligible for the 25 per cent government bonus for another 10 years — up until September 30, 2029.

Martin Lewis, consumer champion and founder of Money Saving Expert, has advised non-homeowners aged 16 and over to open a Help to Buy Isa account before the deadline of November 30, if there is any possibility that they might want to buy a home in the next 10 years.

He said: “The easiest, simplest form of help for first-time buyers to build a deposit closes to new applicants on November 30.

“So if you may one day want to buy a home, consider opening one now with £1 or more, as then the facility stays available until 2029.”

There are two other government home-buying schemes available under the title of Help to Buy — the equity loan scheme and the shared ownership scheme.

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