Help to Buy ISA guide

eskbanker

Kevin_brown wrote: »

Can you use help to buy ISA for a new self build mortgage?

Possibly: which of these (from https://www.helptobuy.gov.uk/help-to-buy-isa/faq/) fits your circumstances?

Can I use a Help to Buy: ISA bonus to buy land to build my first property on?
Assuming that you meet all the other eligibility criteria, you will be able to use the government bonus towards the purchase of the land for a self-build property which is the only home you will own, be where you intend to live and be purchased with a mortgage. The land must be in the UK, have a price of £250,000 or less (with a higher price limit of £450,000 in London).

Can I use the Help to Buy: ISA bonus to fund the construction of a home on land I own?
No. You cannot use a government bonus to fund the construction of a home on land you already own.

I own undeveloped or agricultural land, am I considered a first time buyer?
Yes. If you own land which is undeveloped, and is not in the process of being developed into a residential property, you may still be a first time buyer and able to use a government bonus to purchase a home.

natashaclueit

Really interested in opening a help to buy isa, but as it is limited to how much you can save per month, i was wondering if it is possible to put down a deposit using both a help to buy isa and other savings from another account too? (In Scotland).

TIA

eskbanker

natashaclueit wrote: »

Really interested in opening a help to buy isa, but as it is limited to how much you can save per month, i was wondering if it is possible to put down a deposit using both a help to buy isa and other savings from another account too? (In Scotland).

The short answer to your question is yes, it is possible to combine HTB money with other savings.

However, you may find it worthwhile to use a Lifetime ISA instead, as you can save £4K per tax year in those (without a monthly restriction), so you could pay in £8K in just over three months from now, which would then be boosted to £10K by the government's 25% bonus by late May, although you'd have to wait at least a year after opening one before using it for your first property purchase. See http://www.moneysavingexpert.com/savings/lifetime-ISAs for further details, including a side-by-side comparison with HTB.

Straightbat

"You're not supposed to contribute to a Help to Buy ISA and a cash ISA in the same year, but..."

You do well to cover junior ISAs elsewhere in the help to buy guide but you do not mention them in this subsection. If a child opens a help to buy ISA, can 1. he or she; or 2. his or her parents, pay into an existing junior ISA for the same child in the same tax year?

Thank you.

N.b. thank you for the invitation to post on these forums if we have any questions about the guide. However I've never found a forum system harder to navigate and understand than this one, and I use several!

eskbanker

Straightbat wrote: »

"You're not supposed to contribute to a Help to Buy ISA and a cash ISA in the same year, but..."

You do well to cover junior ISAs elsewhere in the help to buy guide but you do not mention them in this subsection. If a child opens a help to buy ISA, can 1. he or she; or 2. his or her parents, pay into an existing junior ISA for the same child in the same tax year?

The short answer to your question is that yes, payments can be made into both a JISA and a HTB ISA in the same tax year, between the (holder's) ages of 16 and 18, but a more detailed explanation is at clause 22.5 of the full ISA scheme rules, which will always be a more reliable source of accurate information than a summary article on MSE, which can't possibly be expected to cover all of the points in the full 361 pages of the official document!

Straightbat

Thank you for your reply.

The MSE guide does say, "We checked this with HMRC and it told us that just as you can have a 'normal' cash ISA and a junior ISA at the same time if you're aged 16 or 17, the same applies with a Help to Buy ISA.

However, you must open the Help to Buy ISA yourself in your own name – a parent can't do it for you."

But anyone can have multiple ISAs - It's just whether you can subscribe to them both in the same tax year or not. I have looked at the clause in the guidance you have recommended thank you, and it is clear that you can, so I don't think you need to be so cautious about your advice in your post! However, it is helpful to know that you can subscribe up to the individual subscription limits for both between 16 and 18!

Thank you very much again for your help.

Warren1989

I'm buying with cash, is there any way I can use my funds in either a HTB ISA or a LISA to go towards the purchase?

AnnaMe

Thank you for all that useful information. I have a couple more questions, as I am not sure I fully understand. I was hoping to save up enough to buy a small place by next year. I currently have a poor rate easy access cash ISA I had for years and suppose, should apply for a Help to Buy ISA.
Would you suggest to switch my ISA first and then apply for a help to buy?

So I can move the £1200 and then the £200 each month, but keep my additional savings in the ISA? I know it was said that you could not have both simultaneously, but if you had an ISA before you can keep it?

many thanks,
Anna

Alexland

AnnaMe wrote: »

Thank you for all that useful information. I have a couple more questions, as I am not sure I fully understand. I was hoping to save up enough to buy a small place by next year. I currently have a poor rate easy access cash ISA I had for years and suppose, should apply for a Help to Buy ISA. Would you suggest to switch my ISA first and then apply for a help to buy?

You can only contribute to one Cash ISA (and HTB ISA is a type of Cash ISA) in each tax year but your are fine to ISA transfer it between providers and continue contributing.

So if you have (or plan to) made any contributions to your existing Cash ISA this tax year you will need a Split Cash ISA from someone like Nationwide where they will manage both your Cash ISA and HTB ISA account within the same HMRC Cash ISA wrapper. In which case, to follow the rules, you would ISA transfer your Cash ISA to the Split Cash ISA provider before contributing to a new HTB ISA with the same provider.

If you have not made any contributions to your Cash ISA this tax year you are fine to open a HTB ISA with anyone and can move your old Cash ISA to anyone. But you can only contribute to one of them in each tax year.

Also consider the Lifetime ISA (with is not a type of Cash ISA) where you can contribute up to £4k each tax year with a 25% bonus - you can get a cash (with a lowercase 'c') version from Skipton but the account needs to be open 12 months before you can use it to buy a property.

https://www.skipton.co.uk/savings/isas/cash-lifetime-isa

If you go for the HTB ISA or Lifetime ISA (you can only use one towards a first time property purchase) please read the terms carefully to make sure it's an appropriate product for your requirements.

AnnaMe wrote: »

So I can move the £1200 and then the £200 each month, but keep my additional savings in the ISA? I know it was said that you could not have both simultaneously, but if you had an ISA before you can keep it?

Yes but you can do this if both accounts are with the same Split Cash ISA Provider. Otherwise your Cash ISA must have had no contributions this year or in any future years in which you contribute to the HTB ISA.

https://www.nationwide.co.uk/products/savings/help-to-buy-isa/features-and-benefits

"If you’re 16 or over you can open an account (provided you meet the eligibility criteria†), with an initial deposit of up to £1,200, and then make further contributions of up to £200 per calendar month. (You can contribute to another Nationwide cash ISA product at the same time, as long as you don't exceed your total ISA tax-free savings allowance each year.)"

Alex.

benmiskowicz

Hi, in regards to a self-build I've been looking through the FAQ's and just wanted some confirmation, my partner and I own land that we have planning permission on and are in the process of getting a self build mortgage, neither of us own a home already. Will we be entitled to the bonus in these circumstances? Thanks in advance!