Since December 1st, young buyers have been able to open a new type of ISA, receiving a tax-free cash boost from the government of up to £6,000 for couples or £3,000 per person to help them get on the property ladder.
The tax-free accounts are for those saving for a deposit on a property, with the government adding 25% to the value of whatever is saved. Fourteen banks and building societies have signed up to the initiative, each with varying interest rates so it is worth shopping around.
How does it work?
First-time buyers who use the ISA to put together a deposit for their first home will be able to claim a bonus of £50 for every £200 they save each month. Buyers can also choose to open their account with a one-off payment of up to £1,000 which will enable them to claim a a bonus from the government of £250.
A total of £12,000 will need to be saved in the ISA before the maximum government bonus of £3,000 can be received. When you’ve saved your money and put an offer in on your first property, your solicitor will apply to the government to claim the bonus on your behalf, which will then be added to the deposit that you have in your ISA.
As long as you are 16 or over, a UK resident and buying your first property, you are eligible for the Help-to-Buy ISA. The home you are trying to buy must be located in the UK and be £250,000 or less.
If you need help or advice getting your feet on the property ladder, get in touch with Joyce Heeps Homes and see how we can help.