HELP TO BUY INDIVIDUAL SAVINGS ACCOUNTS

 The government have set in place a scheme from 1 December 2015 which will help first time buyers get onto the housing ladder by providing a Government bonus for every saver who uses the Help to Buy ISA scheme. The main features of the Government bonus are:

• The Government will provide 25% of the total amount saved in a Help to Buy ISA (for every £200 saved, the government will be contributing a bonus of £50)
• The maximum Government bonus that can be achieved through the scheme is capped at £3,000 (so the maximum amount of savings is £12,000)
• The bonus will apply to both the amount a person saves into their Help to Buy ISA and the interest that is built up during the period the account is open
• The government bonus will be tax free

The Help to Buy ISA is designed to help first time buyers get onto the housing ladder, the scheme will be designed to ensure the government bonus is used as intended and will only be paid at the point a first home is purchased in line with the following:

• The Government bonus can only be put towards a first home located in the UK with a purchase value of £450,000 or less in London and £250,000 or less in all other parts of the UK
• The Government bonus can only be used towards a property that is being used for the first time buyer to live in as their only residence and not buy-to-let. This will be enforced by the scheme administrator
• The Government bonus can be claimed at the point you choose to buy a property, subject to a minimum bonus amount of £400 (meaning you need to save at least £1,600)
• The government bonus will be calculated by the scheme administrator on the account balance at the point of claim
• The value of the Government bonus will then be used towards the purchase of a first home
• Accounts are limited to one per person rather than one per home therefore those buying together can both receive a bonus
• New accounts will be available for 4 years from 1 December 2015 and once you have opened an account there is no limit on how you long you can save for, although all Government bonuses must be claimed by December 2030
• Accounts are available through banks and building societies from 1 December 2015
• You can make an initial deposit of £1,000 when you open the account in addition to normal monthly savings
• There is no minimum monthly deposit and can save up to £200 a month
• Only available to individuals who are 16 and over
• You cannot save into a Cash ISA and a Help to Buy ISA in the same tax year
• If you have already opened a Cash ISA since April 2015 you will need to close this and transfer the balance, if allowed by the provider
• You are only allowed to open one Help to Buy ISA
• You can still invest money into a Stocks and Shares ISA.  If you invest £2,400 this tax year into the Help to Buy ISA, you still have £12,840 you could invest in a Stocks and Shares ISA, based on the current allowance of £15,240

If you wish further information on the above, please contact McCrea’s on 0141-572-1340 or enquiries@mccreafs.co.uk.