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Can I use a Help to Buy: ISA with Shared Ownership?

Yes, you can use your Help to Buy ISA when purchasing your home using the Shared Ownership scheme.  This guide explains how the Help to Buy: ISA works.

How does it work?

If you are saving to buy your first home, save money into a Help to Buy: ISA and the government will boost your savings by 25%. So, for every £200 you save, receive a government bonus of £50. The maximum government bonus you can receive is £3,000.

The Help to Buy ISA is available from a range of banks and building societies.

The accounts are available to each first time buyer, not each household. This means that if you are planning to buy with your partner, for example, you could receive a government bonus of up to £6,000 towards your first home.

Save up to £200 a month into your Help to Buy: ISA. To kickstart your account, in your first month, you can deposit a lump sum of up to £1,200.

The minimum government bonus is £400, meaning that you need to have saved at least £1,600 into your Help to Buy: ISA before you can claim your bonus. The maximum government bonus you can receive is £3,000 – to receive that, you need to have saved £12,000.

When you buy your first home, your solicitor or conveyancer will apply for your government bonus. Once they receive the government bonus, it will be added to the money you are putting towards your first home.

  • Am I eligible?

    To qualify for a Help to Buy: ISA you must:

    • be 16 or over

    • have a valid National Insurance number

    • be a UK resident

    • be a first time buyer, and not own a property anywhere in the world

    • not have another active cash ISA in the same tax year: If you have opened a cash ISA this tax year, you can open a Help to Buy: ISA but will have to take additional steps.

  • How do I qualify?

    To qualify for the government bonus, the property you are buying must

    • be in the UK

    • cost up to £250,000, or up to £450,000 if you are buying in London

    • not be a second home or a buy-to-let property

    • not be rented out after you buy it

    • be purchased with a mortgage

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

    No. Help to Buy: ISAs are only available to individuals. But, you can put more than one government bonus towards the home you are buying. So, if you are buying a home with someone else who is also a first time buyer, they can open and save money into their own account and receive a government bonus.

  • 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. 

  • 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 or building society to another

  • 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.

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

    You can put money into a cash ISA and Help to Buy: ISA in the same tax year, but you will have to take additional steps.

    If you paid into a cash ISA after 5 April 2015, to open a Help to Buy: ISA this tax year (ie before 6 April 2016), 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 or a non-ISA account.

    If you haven’t opened a new cash ISA this tax year, but have an old cash ISA from a previous tax year then as long as you haven't put any money into an existing cash ISA since 5 April you can open a Help to Buy: ISA.

  • Can I make multiple deposits during a single month?

    Yes. As long as your provider’s terms and conditions allow it, you can make multiple deposits of up to £1,200 in your first month, and up to £200 in following months.

  • Do I have to put away £200 every month?

    No. You don’t have to put money away 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.

    You can’t build your allowance though. For example, if you don’t put money away during January and February, this doesn’t mean you’re allowed to save £600 during March.

  • 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.

  • Will my interest 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. You will not receive a government bonus of more than £3,000.

  • Will I get interest on my government bonus?

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

  • 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.

    You must claim your bonus by 1 December 2030.

  • 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.

  • What is an ISA Manager?

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

  • 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.

    The one exception to this is 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.

  • Can I buy a property without a mortgage?

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

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

    No. However, your name will have to be on the Title Deed of the property.

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

    No. You are free to find the mortgage which best suits you.

  • Can I use my Help to Buy: ISA with Shared Ownership?

    Yes. You can use your Help to Buy: ISA with other government schemes, like the Help to Buy: Mortgage Guarantee and Equity Loan schemes and Shared Ownership. You just need to check the eligibility requirements of the scheme you wish to participate in.

  • How do I apply for my bonus?

    When you find your home, your mortgage lender will ask you to hire a solicitor or conveyancer. They will handle all of the legal aspects of buying your home, including applying for your government bonus.

    When you are close to finishing your purchase, you will need to let your Help to Buy: ISA provider know, and close your account and you will receive a closing letter. You will need to take this letter to your solicitor or conveyancer so that they can apply for your bonus. They will add this to the other money you are putting towards your first home.

    Don’t just withdraw all of your money as you will not receive the closing letter and you won’t be able to claim your bonus.

    If you lose your closing letter, your bank or building society will be able to give a new one.

  • How much will my solicitor charge me?

    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?

    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 do I have before I need to claim my bonus?

    You need to claim your bonus within 12 months of closing your account. 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 claimed your bonus, you can re-open your Help to Buy: ISA. Your solicitor or conveyancer will return your bonus to the government, and give you a document (called a purchase failure notification) confirming your property purchase did not complete.

    If you take this to your bank or building society, 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. However, if you do put your money into a cash or stocks and shares ISA, you won’t qualify for a government bonus if you later use the money to buy a home.

  • Can I use bonus at exchange of contracts?

    When you are close to buying your first home, you will need to instruct your solicitor or conveyancer to apply for your government bonus. Once they receive the government bonus, it will be added to the money you are putting towards your first home. The bonus must be included with the funds consolidated at the COMPLETION of the property transaction. The bonus CANNOT be used for the deposit due at the EXCHANGE of contracts, to pay for solicitor’s, estate agent’s fees or any other indirect costs associated with buying a home.

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