Help to Buy: ISA: FAQ

Opening an account

Multiple ISAs

Paying in to your Help to Buy: ISA

Claiming your government bonus

Property


    • Who can open a Help to Buy: ISA?

      Anyone who is over 16 and a first time buyer.


    • How do I open a Help to Buy:ISA?

      You can open an account with any bank, building society or credit union that offers a Help to Buy: ISA account.


    • Does the fact I have opened a Help to Buy: ISA mean I automatically qualify for a government bonus?

      No. You need to be a first time buyer and the property you are purchasing needs to cost less than the house price cap of £250,000 or less (or £450,000 or less in London).


    • How long will Help to Buy: ISAs be available for?

      You’ll be able to open a Help to Buy: ISA until 30 November 2019. After that date they won’t be available to new savers anymore – but if you opened your Help to Buy: ISA before then you can keep saving into your account until 30 November 2029 when accounts will close to additional contributions.

      You must claim your bonus by 1 December 2030.


    • What is the definition of a first time buyer?

      A first time buyer is someone who does not own, and has never owned, a home anywhere in the UK or the world. A full definition of this can be found here.


    • Can I open a Help to Buy: ISA on behalf of someone else?

      No. Help to Buy: ISAs must be opened by individuals aged 16 years and over and cannot be opened on behalf of someone else.


    • Can I open a Help to Buy: ISA with someone else?

      No. Help to Buy: ISAs are only available to individuals. If you plan to buy a home with someone else who is also a first time buyer, they can open and save money into their own account. If the property you wish to purchase is within the price caps you can separately claim the government bonuses due on your savings and put both bonuses towards the home you are buying.

    • If I close my account, can I open a new Help to Buy: ISA?

      If you hold a Help to Buy: ISA, and close it without claiming your government bonus, you can open a new account in the following tax year (provided the new account is opened before 30 November 2019).


    • What is an ISA Manager?

      Your ISA Manager is your bank, building society, or credit union where you opened your Help to Buy: ISA.


    • Can I use my Help to Buy: ISA with any other Government housing schemes?

      Yes. You can use your Help to Buy: ISA with other Government schemes, like the Help to Buy: Equity Loan scheme (subject to meeting the eligibility requirements of the other scheme/s you wish to participate in). Details of Government housing schemes can be found at: ownyourownhome.gov.uk.

    • I have property in a trust, do I still qualify as a first time buyer?

      If you have or had an ongoing beneficial interest in a residential property via a trust, (including a trust created by a will or divorce), then you are not a first time buyer.

      However, you are still a first time buyer if:
      (a) you are named as a beneficiary of residential property in the will of a person who is still living; or,
      (b) if the trust to which you are or were a beneficiary was only created for the purpose of selling the property and other assets following a death or divorce, and the title of the residential property was never transferred to your name or to a trust which you are an ongoing beneficiary; or
      (c) if you are only acting in a trustee role and will not be entitled as a beneficiary in the future, (and do not have any other interests in residential property).


    • How many Help to Buy: ISAs can I have?

      You can only have one Help to Buy: ISA at any one time. Unlike a cash ISA, you can’t open a new one every year. But you can transfer your Help to Buy: ISA from one bank, building society or credit union to another.


    • I already have a cash ISA – can I open a Help to Buy: ISA too?

      If you have paid into a cash ISA this tax year, in order to open a Help to Buy: ISA, you will have to transfer your active cash ISA to a Help to Buy: ISA. You can transfer up to £1,200 of your active cash ISA balance into your Help to Buy: ISA.

      Anything more than this should be moved into either a stocks and shares ISA, an Innovative Finance ISA, Lifetime ISA or a non-ISA account. However, the total amount saved must not exceed the annual subscription limit for ISAs.

      Alternatively, some ISA managers offer portfolio ISAs which allow you to hold multiple ISA products within a cash ISA wrapper. You can still only subscribe to one cash ISA but it can be made up of one or more cash ISA products, including a Help to Buy: ISA. The standard cash ISA and Help to Buy: ISA allowance limits will still apply.

      Savers are recommended to speak to ISA managers to discuss the options they have.


    • I haven’t opened a new ISA this tax year, but I have an old ISA from a previous tax year. Can I open a Help to Buy: ISA?

      If you haven’t opened a new cash ISA, or put any money into an existing cash ISA this tax year you can open a Help to Buy: ISA.


    • Is there a limit on how much I can save in a Help to Buy: ISA?

      Yes. The maximum amount you can save every month is £200. In the first month you can save an additional £1,000.


    • Do I have to save £200 every month?

      No. You don’t have to save money every month and the amount you save into the account every month is up to you – as long as you don’t go over £200. However, you can’t roll over your allowance.

      For example, if you don’t save any money during January and February, this doesn’t mean you’re allowed to save £600 during March.


    • Do I have to make the deposit at a certain time during the month?

      Your monthly allowance is per calendar month. This means, for example, that if you open your account on 28 March, you will have until the end of 31 March to make any deposits up to the first month’s limit of £1,200. You can then deposit up to £200 any time between 1 April and 30 April and in all following months.

    • Can I make multiple deposits into my Help to Buy: ISA during a single month?

      Yes, as long you do not exceed the monthly allowance. In the first month you can save up to £1,200 and then you can save up to £200 every month.

    • If I transfer my Help to Buy: ISA to another bank, building society or credit union, can I put in the maximum initial deposit of £1,200 again?

      No. You can transfer your Help to Buy: ISA to a different bank, building society or credit union, but your allowances will stay the same. So, even if you did not save the full £1,200 when you first opened your Help to Buy: ISA, you will not be able to save more than your monthly allowance of up to £200.

    • Can I withdraw money from my Help to Buy: ISA?

      Yes. You can withdraw money from your Help to Buy: ISA account at any time. But you can’t put all the money you’ve withdrawn straight back into the account – you’re still only able to save up to £200 in every month. For example, if you deposit £200 and then withdraw £50 in the same month, you will have to wait until the next calendar month to make another deposit.

      If you plan to withdraw all your money in your Help to Buy: ISA for your home purchase, you will need to let your ISA manager know. Your ISA manager will then close your account and provide you with a closing statement. Don’t just withdraw all of your money as you will not receive the closing statement and you won’t be able to claim your bonus.

      There are exceptions if you withdraw your money in order to purchase a home and the sale falls through.


    • When is the Help to Buy: ISA government bonus paid?

      The government bonus is paid once it is certain the transaction will go ahead. This means that your solicitor or conveyancer will claim the bonus between exchange and completion. The government bonus contributes towards your overall deposit (sometimes referred to as the ‘mortgage deposit’) and therefore increases your savings for your first home.

      If you are in the situation where you need the government bonus to make up the deposit on exchange of contracts then your solicitor or conveyancer will be able to advise you on your options. In this instance your solicitor or conveyancer should be able to agree a smaller deposit at exchange with the seller; with the promise of the government bonus to follow as part of the overall deposit.


    • Does the Help to Buy: ISA bonus contribute towards the deposit I need to buy my first home?

      Yes. The government bonus contributes towards your overall deposit (sometimes referred to as the ‘mortgage deposit’) and therefore increases your savings for your first home. When calculating the size of your mortgage, banks, building societies and credit unions will seek evidence of the funds that you have available to put towards your first home. This will include the amount that has been saved into your Help to Buy: ISA account and banks, building societies or credit unions will factor in the amount of the government bonus into their calculation of how much you need to borrow.


    • What is the difference between an exchange deposit and a mortgage deposit?

      A ‘mortgage deposit’ is the amount you are contributing towards your first home upfront. For instance, you may pay 5% of the value of the property upfront and borrow the remaining 95% from a bank or building society.

      An ‘exchange deposit’ is the money your conveyancer pays to the seller’s conveyancer at the point of exchanging signed copies of the contract.


    • Is the size of an exchange deposit negotiable?

      Yes. An exchange deposit can be negotiable. Your solicitor or conveyancer will be able to advise you on your options.


    • Will my interest on my savings count towards my government bonus?

      Yes. Your government bonus will be calculated based on the amount of money you have in your account when you close it. This includes both the money you have saved, and any interest you have earned on that money. The maximum government bonus is £3,000.


    • Will I get interest on my government bonus?

      No. Your government bonus won’t be paid into your account. Just prior to completing on your first home purchase, your solicitor or conveyancer will apply for your bonus. Once they receive the bonus, they will transfer it to the seller with the other money you are putting towards your new home.


    • How do I apply for my bonus?

      When you find your home, your prospective mortgage lender will ask you to hire a solicitor or conveyancer. They will handle all of the legal aspects of buying your home and can advise you on whether the property you are buying is eligible for a government bonus. In order to claim a bonus your conveyancer will need a closing statement from your Help to Buy: ISA account. So when you need to withdraw all of your funds make sure you close your account and get a closing statement from your ISA manager. Don’t just withdraw all of your money as you will not receive the closing statement and you won’t be able to claim your bonus. If you lose your closing statement, your ISA provider will be able to give you a new one. You will need to take this closing statement to your solicitor or conveyancer so that they can apply for your bonus.

      Your conveyancer will apply for your government bonus on your behalf. The bonus will be sent to your conveyancer or solicitor to be included with the other funds which have been consolidated for the completion of the property transaction.

      If completion is imminent, there is an expedited bonus application process that your solicitor or conveyancer can follow that does not require a closing statement. You should speak to your solicitor or conveyancer to find out more.


    • How do I apply for a Help to Buy: ISA government bonus if I am exchanging and completing on the same day?

      Your conveyancer will still use the standard bonus application process, but it will be important that you speak to your ISA manager and solicitor or conveyancer as early as possible to inform them that you wish to claim a government bonus.

      There is an expedited bonus application process that your solicitor or conveyancer can follow that does not require a closing statement and where an up-to date Help to Buy: ISA account statement can be used instead.


    • Can I use the money I have saved in my Help to Buy: ISA for the deposit at exchange of contracts for my home purchase?

      Yes. If you plan to use the money you have in your Help to Buy: ISA to pay for the deposit at exchange of contacts you will need to let your ISA manager know. Your ISA manager will then close your account and provide you with a closing statement. You can then withdraw your savings from your account and use those savings towards the deposit at exchange. It is important that you don’t just withdraw your savings without getting a closing statement. The government bonus will be paid out just prior to completion and contribute to the overall deposit.


    • How much will my solicitor or conveyancer charge me to process my government bonus application?

      Your solicitor or conveyancer cannot charge more than £50 + VAT to process your bonus application.

    • What about if I want to buy a home before I’ve saved enough to claim the £3000 bonus?

      You need to save at least £1,600 to receive the minimum government bonus of £400. If you close your account without saving that amount you will not receive a bonus. If your Help to Buy: ISA has a balance of £1,600 or more, you can apply for your bonus at any time.


    • How long after I close my account do I have before I need to claim my bonus?

      You need to claim your bonus within 12 months of closing your account and before the completion of your home purchase. You should not close your Help to Buy: ISA unless you are confident that you are about to buy a home.


    • What happens if my house purchase does not go ahead?

      If your property purchase doesn’t go through after you have closed your Help to Buy: ISA in anticipation of claiming a bonus, you can re-open your Help to Buy: ISA. To do this your solicitor or conveyancer will give you a document (called a purchase failure notification) confirming your property purchase did not complete. If you take this to your bank, building society or credit union, they will re-open your account for you. At this point, you will be able to deposit your money as a lump sum. So, if you closed your account with £12,000 in it, you will be able to re-deposit £12,000. If you decide not to re-open a Help to Buy: ISA, you can use your purchase failure notification to deposit your lump sum in a cash or stocks and shares ISA. This will not count towards your annual ISA subscription limit.

      If the government bonus has already been transferred, your solicitor or conveyancer will first need to return your bonus to the Help to Buy: ISA Scheme Administrator before you can receive a purchase failure notice.


    • I am having problems with my Help to Buy: ISA and wish to make a complaint.

      If your complaint is about your Help to Buy: ISA provider, or anything to do with the management of your account you should complain directly to your ISA provider. If you are not satisfied with your ISA provider’s response to your complaint, you can contact the Financial Ombudsman Service. You can email them: complaint.info@financial-ombudsman.org.uk or call them on 0300 123 9123.

      If your complaint is about your solicitor or conveyancer, or to do with the handling of your bonus application you should complain directly to your solicitor or conveyancer. If you are not satisfied with your solicitor’s or conveyancer’s response to your complaint, you can contact the Legal Ombudsman. You can call them on 0300 555 0333 or complain directly via their website.

      If your conveyancer is not a registered solicitor you should make a complaint to the Council of Licensed Conveyancers. Details on how to do this can be found by contacting them by email at clc@clc-uk.org, or by telephone 0207 250 8465. If your complaint is about the processing of a bonus application, you should contact the scheme administrator here.


    • Is the property I am buying eligible for the government bonus?

      To qualify for the government bonus, the property you are buying must: be in the UK, have a price of £250,000 or less (with a higher price limit of £450,000 in London), be the only home you will own, be where you intend to live and be purchased with a mortgage.


    • What is the maximum that my property can cost to qualify for a government bonus?

      To qualify for a government bonus, the property you are buying must have a price of £250,000 or less (or a higher price limit of £450,000 in London) and you must be a first time buyer.


    • How do I know if the property I am buying is eligible for the London price cap?

      A link to the London boroughs that are eligible for the £450,000 price cap can be found here.


    • Do I have to live in the home I am buying?

      Yes. This must be your only home, and cannot be rented out or used as a holiday home.


    • Are there any exceptions for members of the armed forces and their spouses or civil partners to rent out the property being purchasing?

      For members of the armed forces and their spouses or civil partners, if you intend to use the property as your main residence, then you will still be eligible for the scheme, even if you are unable to live in it as your main home when you first purchase it. When you first purchase your property, you will be able to rent it out until you are able to move in.


      • What if my personal or professional circumstances change after I buy the property and I need to rent it out?

        The Government recognises that your personal or professional circumstances may change at some point in the future, in which case you may need to rent out your property.

        The Government is clear that it will not claim Help to Buy: ISA bonuses back from people whose personal or professional circumstances have changed and who need to make different arrangements for their property, for example if their employment status or family circumstance changed.

        However, in accordance with the rules of the Help to Buy: ISA scheme, if a person claims a Help to Buy: ISA bonus and has no intention to make the property their sole residence, then the Government will seek a return of the bonus.


      • Are shared ownership properties eligible for a government bonus?

        Yes, if all the other scheme eligibility criteria are met.


      • What is the property price cap for shared ownership schemes?

        In the context of shared ownership properties the price cap applies to the full sale price of the property rather than just the share you initially buy. For shared ownership properties the full sale price is a multiple of the equity share you are buying. In practice this means that if you are purchasing a 25% equity share of a property for £50,000, the full sale value is £200,000. Alternatively, your conveyancer can calculate the sale price based on the price paid for the equity share you are buying plus the net present value of rental payments due over the term of the lease.

        You should speak to your solicitor or conveyancer and they will be able to advise you on whether the property you are purchasing is within the price limit and is eligible for a government bonus.


      • Are joint ownership property purchases (including tenants in common and joint tenant property purchases) eligible for a government bonus?

        Yes, if all the other scheme eligibility criteria are met.


      • What is the property price cap for a joint ownership (including tenants in common and joint tenant) property purchase?

        In the context of joint ownership (including tenants-in-common and joint tenants), the house price cap applies to the full sale price for the whole property rather than just the share you are buying. You should speak to your solicitor or conveyancer and they will be able to advise you on whether the property you are purchasing is within the price limit and if it is eligible for a government bonus.


      • Can I use a Help to Buy: ISA bonus to buy land to build my first property on?

        Assuming that you meet all the other eligibility criteria, you will be able to use the government bonus towards the purchase of the land for a self-build property which is the only home you will own, be where you intend to live and be purchased with a mortgage. The land must be in the UK, have a price of £250,000 or less (with a higher price limit of £450,000 in London).


      • Can I use the Help to Buy: ISA bonus to fund the construction of a home on land I own?

        No. You cannot use a government bonus to fund the construction of a home on land you already own.


      • I own undeveloped or agricultural land, am I considered a first time buyer?

        Yes. If you own land which is undeveloped, and is not in the process of being developed into a residential property, you may still be a first time buyer and able to use a government bonus to purchase a home.


      • Can I use a Help to Buy: ISA bonus to purchase a new build property?

        Yes. You can use a government bonus to purchase a new build property, providing all other eligibility criteria are met.


      • Do I have to take my mortgage out with my Help to Buy: ISA provider?

        No. You are free to find the mortgage with any bank, building society or credit union.


      • Do I have to be on the mortgage of the property I am buying?

        In order to be eligible for a government bonus you need to be on the title deed of the property and the property must be purchased with the assistance of a mortgage. Under the Help to Buy: ISA Scheme Rules, you don’t need to be named on the mortgage of the property, however your lender may require all individuals named on the title deed to also be named on the mortgage.


      • What is a legal mortgage?

        Your conveyancer will be able to advise you on the definition of a legal mortgage and whether your mortgage is eligible. A legal mortgage is defined by reference to the Law of Property Act 1925.


      • Can I buy a property without a mortgage and be eligible for a government bonus?

        No. The property you are buying must be mortgaged in order to be eligible for the government bonus.


      • I’ve already saved into a Help to Buy: ISA. Can I take advantage of the Lifetime ISA?

        Yes. The Lifetime ISA was launched on 6 April 2017 to help young people save flexibly for the long term towards a first home and retirement at the same time. Adults under age 40 will be able to open and save up to £4,000 each year into a Lifetime ISA and receive a 25% government bonus (paid annually at the end of the 2017-18 tax year and monthly for all future tax years). Individuals will be able to contribute to their Lifetime ISA and receive an annual government bonus on their contributions up to the age of 50. Savings invested in a Lifetime ISA can be withdrawn after age 60, or at an earlier age if they are being used to buy an individual’s first home worth up to £450,000 in the UK. There is a 25% government charge on all other withdrawals, recouping the government bonus and any interest on it plus a small additional charge on the individual’s own savings.

        During the 2017-18 tax year only, those with a Help to Buy: ISA will be able to transfer in the savings they have built up before 6 April 2017 to the Lifetime ISA, and still save an additional £4,000 into a Lifetime ISA in that year. The whole amount saved will benefit from the 25% government bonus. However, there is an initial minimum holding period of 12 months from account opening before withdrawals that can be made for a home purchase. It is recommended that you check with LISA providers for any restrictions they may have on transferring Help to Buy: ISAs.

        You can chose to save into both schemes if you meet the eligibility criteria, however, you will only be able to use the bonus from one to buy a house.

        More details on the features of the Lifetime can be found at: lifetimeisa.campaign.gov.uk.