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Getting the most from your Help to Buy ISA account

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The government closed access to new help to buy ISA accounts from 30th November 2019 and onwards. If you were fortunate enough to have opened a help to buy ISA prior to this date this guide will be useful to help you optimise the account for buying your first property. At Johnson Astills we are committed to help guide first time buyers through buying their first home.

What is the Help to Buy ISA and what are the benefits?

The Help to Buy ISA scheme is a government incentive to aid first time buyers. The government has committed to providing a bonus of the savings in the ISA up to a limit of £3,000. The maximum you would need to save in the ISA is £12,000 to have access to the full bonus on offer (£3,000). The maximum you can save per month is £200.00 with an exception for when you first open the ISA; at this point, you can save £1,200 for the first month.

The property price must not be over £250,000 or £450,000 (in London) for the ISA to apply. The ISA is only applicable for residential purposes only and cannot be utilised to purchase a buy to let property. You cannot buy a property to live in and then convert this to a buy to let using the help to buy ISA.

The main benefit of the ISA is the ability to have free access to your savings. You can deposit and withdraw your savings without charge and without any prior notice which makes saving in the ISA both flexible and attractive.

Points to consider when buying your first home

One thing to consider when utilising your ISA for your first purchase is when you close the account. It is worth mentioning to your solicitor if you can keep your account live to save another month or two worth in savings to increase the amount in the ISA and in turn the bonus available.

It is essential to note that the contents of the savings in the ISA account cannot be used towards your exchange deposit. The exchange deposit is used for the exchange of contracts and to make the transaction a legally binding agreement.

Your solicitor will make you aware when it is time to close the account and to complete the first-time buyer declaration in readiness to request the bonus for completion of the transaction. The government bonus is paid directly to your solicitor.

If you are a first-time buyer or have a Help to Buy ISA and looking to purchase your first property our Conveyancing team at Johnson Astills can assist you and provide you with further information regarding any conveyancing queries. Please contact us at our Leicester Office or Loughborough Office on 0116 2554855 or 01509 610312