31st October 2019
Final Call for Help to Buy ISAs
Unless the Government choose to extend the deadline, the Help to Buy ISA is due to be scrapped on the 30th November 2019, meaning time is running out for first-time buyers wishing to take advantage of a product that offers tax-efficient savings as well as generous top-ups from the Government.
If you have between £1 and £1,200 and are over the age of 16 and decide to take advantage of opening a Help to Buy ISA before the deadline, you must make sure that you complete your property purchase by 1st December 2030 in order to benefit from the 25% government bonus (as no bonuses will be paid after this date).
All is not lost after the 30th November for UK residents aged between 18 to 39. The Lifetime ISA (LISA) was introduced in 2017 and will effectively replace the Help to Buy ISA once the 30th November deadline has passed and in summary provides the following features:
• The LISA allows you to save up to £4,000 a year compared to £2,400 per year with a Help to Buy ISA.
• It can be used to buy a property up to the value of £450,000.
• The 25% government bonus is paid into your account monthly whereas it is only paid in upon completion of your property with a Help to Buy ISA. This has two main advantages. Firstly, you earn interest on the money that the government pays in and secondly, as the money is available prior to completion, it can be used towards legal fees.
• There’s the opportunity to receive more than £3,000 in government top-ups.
• Both people in a couple can have a LISA.
• A LISA can be a stocks and shares ISA or a cash ISA.
• If you decide not to buy a property, a Lifetime ISA continues for your lifetime and can be used as a pension, meaning you can gain access to the money, including the government bonus from the age of 60 (penalties are payable for making cash withdrawals outside of these requirements unless diagnosed with a terminal illness).
*Restrictions apply to Help to Buy ISAs as well as Lifetime ISAs.
Whatever you decide, it is worth thoroughly researching your options and working out which ISA works best for you in your individual circumstances.
For more information on this article or any other residential property-related matter, please contact Helen Batt, Partner and Head of Residential Property at Buss Murton Law on
T: 01892 510 222 or E: HBatt@bussmurton.co.uk