08 Mar 2016
The Government has recently extended its Help to Buy scheme with the introduction of the Help to Buy ISA. Stay up to date with the key points on the scheme.
The scheme is designed to assist first time buyers with the purchase of a property up to the value of £450,000.00 in London and £250,000.00 elsewhere.
To qualify as a first time buyer, you would need to show that you do not own, and have never owned, a home anywhere in the UK or the world. As conveyancers, we have a key role to play in the administration of the Help to Buy ISA scheme.
The finer details
Once a Help to Buy ISA account has been opened, you will be able to deposit a maximum of £200.00 per month into the account. The Government will then “top up” your savings by 25%. The maximum government contribution is £3,000.00, which means that you will need to have saved £12,000.00 over a five year period to be eligible for the full amount.
The minimum contribution is £400.00, meaning that £1,600.00 must be saved to be eligible to receive any funds under the scheme.
If you are purchasing a property in joint names, and each purchaser satisfies the criteria of a first time buyer, you will both be eligible to open a separate account. As a result, you will be able to benefit from the government contribution twice on the same transaction.
It is worth noting that the funds from the Help to Buy ISA scheme can only be used to purchase a property for use as your primary residence. The property will not be able to be used as a buy to let at any point.
The next stages
Once you have decided to purchase a property using your Help to Buy ISA savings, the next stage would be to instruct a conveyancer to act for you. You will not be able to request the Government contribution yourself, as this must be done by a conveyancer. It is important to ensure that your chosen conveyancer is registered with the scheme to be able to request the contribution from the Government.
The Government has confirmed that the conveyancer is only entitled to charge an additional fee of £50.00 plus VAT for the work involved in requesting the funds and administering the scheme.
More information on the Help to Buy ISA scheme
This article was written by Brethertons Solicitors
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