Help to Buy ISA guide

eskbanker

Adelemurray wrote: »

I just wondered why I can't purchase a house of more than £250,000 with the help to buy ISA?
Why should there be a limit?

The scheme is intended to assist those who are genuinely needing help to get onto the housing ladder by giving them a handout of money that ultimately comes from taxpayers - many would resent a minuscule slice of their taxes going to subsidise someone who doesn't really need help to buy themselves a valuable asset.

So, that's why there's a limit rather than a blank cheque approach - naturally some, especially in expensive areas, will feel that the limit is too low and that they deserve help but the line has to be drawn somewhere.

Having said that, have you considered Lifetime ISA as an alternative, with its higher £450K property value cap?

badger09

Adelemurray wrote: »

I just wondered why I can't purchase a house of more than £250,000 with the help to buy ISA?
Why should there be a limit?

Because that is what the government decided when they introduced the scheme.

Rich2808

eskbanker wrote: »

The scheme is intended to assist those who are genuinely needing help to get onto the housing ladder by giving them a handout of money that ultimately comes from taxpayers - many would resent a minuscule slice of their taxes going to subsidise someone who doesn't really need help to buy themselves a valuable asset.

No - that is just the spin!

You could equally argue why is it right that the taxpayer should subsidise someone buying a £450,000 property in London through a help to buy isa. To get a mortgage to buy a £450k property without a huge deposit would mean you would need to earn £100k+a year or more than 3 times average wages. Why exactly does someone earning £100k merit a government handout paid for by those earning far less out of their taxes?

None of these schemes to help first time buyers are primarily there to help first time buyers - they are there to keep house prices high and make the board members and shareholders of the major developers extremely wealthy. Anyone who thinks otherwise really isn't paying attention!

Now if you earn £100k and can afford to buy a £450k property - fill yer boots. But lets not pretend anyone is helping the poor and downtrodden - they won't be helped at all as they don't earn enough to buy anyway and a £3k bonus won't change that.

mills.123

Does anyone know if you can use your 25% governemnt contribution to pay for the solicitor's fees?


Thanks!

masonic

mills.123 wrote: »

Does anyone know if you can use your 25% governemnt contribution to pay for the solicitor's fees?

No, it must be put towards the funds used at completion to buy the property.

eskbanker

masonic wrote: »

mills.123 wrote: »

Does anyone know if you can use your 25% governemnt contribution to pay for the solicitor's fees?

No, it must be put towards the funds used at completion to buy the property.

This is undoubtedly the correct answer as defined by the scheme rules, which are quite unambiguous on the subject.

However....

Over on the house buying board, there are many tales of conveyancers who are prepared to have the government bonus added to the overall pot of money due at completion, meaning that the bonus money is effectively used towards fees, etc, rather than necessarily being directly traceable to a contribution to the purchase price.

There are some examples of this at https://forums.moneysavingexpert.com/discussion/5966715/help-to-buy-isa-explanation-please (among other threads) so it's perhaps worth discussing with your solicitor to establish how flexible they're able and willing to be, as it's their opinion rather than that of anonymous internet strangers that you'll be counting on!

Alexland

eskbanker wrote: »

Over on the house buying board, there are many tales of conveyancers who are prepared to have the government bonus added to the overall pot of money due at completion, meaning that the bonus money is effectively used towards fees, etc, rather than necessarily being directly traceable to a contribution to the purchase price.

I would rather have a solicitor who went to the effort to understand the scheme rules. If they allow you to use the HTB ISA bonus (or LISA withdrawal) towards the expenses it makes me wonder what else are they not doing properly...

Alex

masonic

eskbanker wrote: »

This is undoubtedly the correct answer as defined by the scheme rules, which are quite unambiguous on the subject.

However....

Over on the house buying board, there are many tales of conveyancers who are prepared to have the government bonus added to the overall pot of money due at completion, meaning that the bonus money is effectively used towards fees, etc, rather than necessarily being directly traceable to a contribution to the purchase price.

There are some examples of this at https://forums.moneysavingexpert.com/discussion/5966715/help-to-buy-isa-explanation-please (among other threads) so it's perhaps worth discussing with your solicitor to establish how flexible they're able and willing to be, as it's their opinion rather than that of anonymous internet strangers that you'll be counting on!

Well, of course, armed with a solicitor willing to break the rules (either deliberately or through ignorance), a lot can be achieved. I'm reminded of an account of someone who convinced their solicitor to put in a fraudulent bonus claim over 2 weeks after completion because one or both parties overlooked the need to process the claim several weeks earlier.

The trouble with these things is you never know what will happen if, at the 11th hour, someone realises what is being done and tries to put a stop to it.

The workaround in this particular circumstance is to use the bonus towards completion, but take advantage of the loophole whereby the capital saved in the HTB ISA does not need to be put towards the purchase.

Chels88

Hi all,

Forgive my naivety but I'm totally new to this and just have one question that is puzzling me.

Can anybody explain to me why the Help to Buy ISA's all seem to have a cap of 200 pound per month after initially opening the account?
The reason I ask this is that my job gives me a quarterly bonus, so some months I might want to put in a larger lump sum but it seems I wouldn't have the option to do this with any of the Help to Buy ISA providers.

Is there a reason for this?

Alternatively, my first thought was to have a second 'savings account' where I could add any lump sums beyond the 200 pound monthly cap that I could eventually add to what I've saved in the ISA to contribute to my mortgage deposit -- but you can only pay into one ISA at any one time right?

Are there any help to buy ISA's that give you the option of adding additional payments beyond the 200 monthly? If not, why?

Thanks

Alexland

The £200 monthly cap is a rule of the government HTB ISA scheme as it is intended for people who gradually save up to buy a property. You might want to consider the Lifetime ISA where you can add up to £4k per tax year for a 25% government bonus.


Alex