Help to Buy ISA guide

margaretx9

kuratowski said:

If you can buy a house for cash then why would you need a bonus from the government?

If you earn £100K and have a £50k deposit and afford to buy a £450k property - why would you need a bonus from the government?!
More in need than someone who buys a flat in Middlesbrough for £30k cash with a inheritance from their gran?
Probably not - but that is the scheme George Osborne set up. Cos those £100k earners obviously need our help desperately!

kuratowski

@leitmotif
Some good points above.  One other thought I've just had, if you are a pure cash buyer (no mortgage, no chain) then you will be well placed to negotiate with the vendor and could well save yourselves more than £6k on the purchase price.  This is worth keeping in mind.

leitmotif

Alexland said:

leitmotif said:

Some good points here, Alexland. Many thanks. Another option not ruled out is to buy more than one property, with a mortgage (and therefore the bonus) for one.

Yes or maybe one each to avoid the extra stamp duty on a second home but then you'd have duplicate mortgages (to claim both HTB ISAs) and legal costs. Did you want to pay double bills for a holiday home or rent one out with the associated tenant hassle and tax implications? Surely there's a limit to how much you would want to compromise your situation to claim these bonuses?

Yes, there are definitely limits. I'm just considering all possibilities. At the end of the day, it's only £6K, but it's still £6K I've 'earned' by meeting the criteria and if it's on the table, I'm happy to weigh up the options.

leitmotif

kuratowski said:

@leitmotif
Some good points above.  One other thought I've just had, if you are a pure cash buyer (no mortgage, no chain) then you will be well placed to negotiate with the vendor and could well save yourselves more than £6k on the purchase price.  This is worth keeping in mind.

That is certainly a good point.

Alexland

leitmotif said:

Yes, there are definitely limits. I'm just considering all possibilities. At the end of the day, it's only £6K, but it's still £6K I've 'earned' by meeting the criteria and if it's on the table, I'm happy to weigh up the options.

Well to help settle your mind if you don't claim the £6k bonus, if you are both under 40 and can each put £4k pa (until age 50) into a S&S LISA for retirement at age 60 then that would earn £1k pa bonus. Have a look at AJ Bell YouInvest as their fee structure is well suited to this contribution pattern.

https://www.gov.uk/lifetime-isa and https://www.youinvest.co.uk/lifetime-isa

leitmotif

Alexland said:

leitmotif said:

Yes, there are definitely limits. I'm just considering all possibilities. At the end of the day, it's only £6K, but it's still £6K I've 'earned' by meeting the criteria and if it's on the table, I'm happy to weigh up the options.

Well to help settle your mind if you don't claim the £6k bonus, if you are both under 40 and can each put £4k pa (until age 50) into a S&S LISA for retirement at age 60 then that would earn £1k pa bonus. Have a look at AJ Bell YouInvest as their fee structure is well suited to this contribution pattern.

https://www.gov.uk/lifetime-isa and https://www.youinvest.co.uk/lifetime-isa

Not eligible for a LISA, I'm afraid. But thanks for suggesting it. Perhaps it'll help someone else reading this. 

Courtneyo1

Hi,
Myself and my partner have both got help to buy ISA’s and we are saving on top of this in our own savings accounts. We are starting to look at houses and as I understand it the bonus from the ISA has to be used towards the house, but I am a little bit confused on whether the money that we have contributed to the ISA has to go towards the house also or could we use that money for renovations? Would anybody be able to clarify this for me please?

afis1904

You will have to close the Help to buy ISA prior to your solicitor applying for the bonus but as far as I know there are no rules forcing you to use the money you've saved for the purchase itself.

Annieg318

If I’m looking to buy in September of 2021 and I open a Lifetime ISA am I right in thinking I would be able to deposit £8000 as it’s across two tax years? and I know I have to wait 1 year to use my LISA but is that from the day I open it? 

kuratowski

Annieg318 said:

am I right in thinking I would be able to deposit £8000 as it’s across two tax years? 

Yes

Annieg318 said:

I know I have to wait 1 year to use my LISA but is that from the day I open it? 

Yes