Help to Buy ISA guide

jay213

anewloginapparently wrote: »

The Telegraph article has confused and worried me.

So can I not use my help to buy ISA for a deposit (which is the purpose of which I'm saving in it). I don't have any other savings vehicles and no access to the bank of Mum & Dad so I was hoping to save about £6000 into my ISA which would then give me a £7500 deposit on a £75k flat with the bonus.

Is this not how it works? Do I need to save a separate £7500 deposit and the help to buy ISA is just for moving expenses?

Or is it that I'll have a £6000 deposit and get a £1500 bonus after I've exchanged for moving expenses?

I'm confused as hell and that article really isn't clear? But now I'm worried I've put all my eggs in the wrong basket.

I have not been following this but from what I just looked at it seems after you've completed the purchase, that money comes off your mortgage and your solicitor has to claim the bonus back too.

I too thought it was for deposits and I was thinking of opening one up and came across this whilst doing a bit of research this morning.

themanfromamarillo

anewloginapparently wrote: »

The Telegraph article has confused and worried me.

So can I not use my help to buy ISA for a deposit (which is the purpose of which I'm saving in it). I don't have any other savings vehicles and no access to the bank of Mum & Dad so I was hoping to save about £6000 into my ISA which would then give me a £7500 deposit on a £75k flat with the bonus.

Is this not how it works? Do I need to save a separate £7500 deposit and the help to buy ISA is just for moving expenses?

Or is it that I'll have a £6000 deposit and get a £1500 bonus after I've exchanged for moving expenses?

I'm confused as hell and that article really isn't clear? But now I'm worried I've put all my eggs in the wrong basket.

I think what the article says is that you can't use the bonus for the initial deposit, you only get the bonus after the transaction is complete. You still can to use the £6000 you have in the account for a deposit and indeed you must if you want to get the bonus.

masonic

anewloginapparently wrote: »

The Telegraph article has confused and worried me.

That's probably deliberate.

So can I not use my help to buy ISA for a deposit (which is the purpose of which I'm saving in it). I don't have any other savings vehicles and no access to the bank of Mum & Dad so I was hoping to save about £6000 into my ISA which would then give me a £7500 deposit on a £75k flat with the bonus.

Is this not how it works?

That's how it works. The bonus is added to the funds you put into the property transaction at completion (the difference between the price of the property and your mortgage, otherwise known as the mortgage deposit). It can't be used for anything else that happens to be referred to as a deposit, such as the exchange deposit. Other types of deposits will be refundable on completion, so they are not really part of the cost of the property, although they are often rolled into the mortgage deposit.

Edit: ...and if paying the exchange deposit is proving a financial barrier, you could look into exchanging and completing on the same day, in which case an exchange deposit would not be payable.

spidermev

anewloginapparently wrote: »

The Telegraph article has confused and worried me.

So can I not use my help to buy ISA for a deposit (which is the purpose of which I'm saving in it). I don't have any other savings vehicles and no access to the bank of Mum & Dad so I was hoping to save about £6000 into my ISA which would then give me a £7500 deposit on a £75k flat with the bonus.

Is this not how it works? Do I need to save a separate £7500 deposit and the help to buy ISA is just for moving expenses?

Or is it that I'll have a £6000 deposit and get a £1500 bonus after I've exchanged for moving expenses?

I'm confused as hell and that article really isn't clear? But now I'm worried I've put all my eggs in the wrong basket.

As this is still a new product I think it depends on your solicitor. When I cashed mine in, I asked early on in the process and the solicitor said he can only apply for it after completion, which worried me a little. A week or so after completion we got a cheque through the post with a bunch of other paper work from them. For us it was more of a reimbursement than money towards the deposit.

masonic

spidermev wrote: »

As this is still a new product I think it depends on your solicitor. When I cashed mine in, I asked early on in the process and the solicitor said he can only apply for it after completion, which worried me a little. A week or so after completion we got a cheque through the post with a bunch of other paper work from them. For us it was more of a reimbursement than money towards the deposit.

Hopefully HM Treasury will not find out that you were not a first time buyer when the bonus was applied for.

https://www.helptobuy.gov.uk/documents/2015/12/eligibility-of-ftbs.pdf

I understand that making a false or misleading statement in this First Time Buyer Declaration may give rise to personal liability and may, in accordance with the Scheme Rules, cause the amount of any Bonus payment that I receive to become immediately due and payable to the Administrator

anewloginapparently

Thinking about the new lifetime ISAs that are coming next April, the bonus for them is paid into the account yearly isn't it? So they might be better for raising money for a deposit?

MARTYM8`

masonic wrote: »

Hopefully HM Treasury will not find out that you were not a first time buyer when the bonus was applied for.

https://www.helptobuy.gov.uk/documents/2015/12/eligibility-of-ftbs.pdf

Given how much abject fraud goes on relating to the UK housing market which the Government and councils turn a blind eye too I doubt much effort will be made on that front. The Government will generally be getting a lot more back in stamp duty anyway (e.g. if you buy a £450k flat in London you will pay £12,500) - a net gain for them at present of £11,000 plus for a couple and more for a single buying.

masonic

MARTYM8` wrote: »

Given how much abject fraud goes on relating to the UK housing market which the Government and councils turn a blind eye too I doubt much effort will be made on that front. The Government will generally be getting a lot more back in stamp duty anyway (e.g. if you buy a £450k flat in London you will pay £12,500) - a net gain for them at present of £11,000 plus for a couple and more for a single buying.

Well it is clear that the above purchase would still have gone ahead without the bonus, because that's exactly what happened. So I don't see how the bonus has any influence on the stamp duty paid in this case.

Others have reported in this thread that they had their bonus withheld due to completing before it was paid, so it seems some effort is being made.

MARTYM8`

masonic wrote: »

Well it is clear that the above purchase would still have gone ahead without the bonus, because that's exactly what happened. So I don't see how the bonus has any influence on the stamp duty paid in this case.

Others have reported in this thread that they had their bonus withheld due to completing before it was paid, so it seems some effort is being made.

I agree the bureaucrats will tick the boxes.

But what checks will be done as to whether the applicant once owned all or part of a property abroad – as could apply for EU nationals who are eligible. That requires a bit more effort – and assumes the land registry databases in say the former Communist states are 100% accurate.

If you owned a property in the UK you might get caught – in Romania or Slovakia less certain.

MQA

ignore this post, it is just a test.