Help To Buy ISA, How It Works & Is It Worth It?
So with the new tax year fast approaching, I would like to help you all make the most out of the new tax changes fast approaching on April 6th. If you are a first-time buyer wanting a Help to Buy ISA, then I have put together this article to hopefully provide you with some useful information and advice.
So as many of you ‘soon to be’ first-time buyers will of already heard, it was announced in the Budget that a new first-time buyers Help to Buy ISA would be put in place after April 6th. The new scheme will see the government add £50 to every £200 you put into the ISA in a bid to help first time buyers get onto the property ladder.
I personally think this a great idea, however if you are thinking of opening one yourself, there are a few things you should be aware of first. For example, those of you who open or top-up an existing cash Isa from April 6 will not be able to take out a Help to Buy Isa until April 2016.
It might be worth noting that you can’t subscribe to two savings accounts in one year and your Help to Buy Isa will be treated like a cash Isa meaning that only one of these accounts can be opened a year. If you currently have a direct debit to an existing cash ISA, then stop it now or you won’t be eligible for the new scheme when it is put in place this Autumn.
There will be a cap on how much the government will be contributing to the ISA’s and this will be £3,000, which means in order for you to receive the full amount and get the absolute most out of the ISA, you will need to save £12,000.
The accounts will be made available to anyone who has never owned a home before and is open to anyone at the age of 16 or over! The scheme can be used for deposits on homes costing up to £450,000 in London and up to £250,000 elsewhere in the UK, which account for more than nine in 10 first-time buyer purchases!
So remember, if you are thinking of going ahead with the Help to Buy Isa, cancel direct debits now that are going towards separate cash Isa’s, otherwise you may be waiting much much longer than expected before you can take advantage of this brilliant opportunity.