Help to Buy ISA guide

oridiusmorphius

Thanks for the Article, very informative, and what a pain 
We were never told there was a limit on the ISA for the property, we are looking at one that is in Milton Keynes and it costs more than £250k, so we have no way of getting the 25% discount now 
At least we can get the interest as i have had it for over 2 years now.

Simonm

Hi everyone,

I think I know the answer to this but just wanted to double check!

I closed my Help to Buy ISA on 30th September 2019 as I'd had an offer accepted on a property, and my solicitor advised me the bank could take a long time to make the funds available. The purchase finally fell through last week after a long saga. Am I correct in thinking that as twelve months have passed since the account closure I can't open it again and have lost the government bonus? Thanks!

eskbanker

Simonm said:

I closed my Help to Buy ISA on 30th September 2019 as I'd had an offer accepted on a property, and my solicitor advised me the bank could take a long time to make the funds available. The purchase finally fell through last week after a long saga. Am I correct in thinking that as twelve months have passed since the account closure I can't open it again and have lost the government bonus?

You're right that the passage of 12 months removes any rights to reopen a HTB ISA - how far in advance of anticipated completion date did your solicitor advise account closure?

Simonm

eskbanker said:

You're right that the passage of 12 months removes any rights to reopen a HTB ISA - how far in advance of anticipated completion date did your solicitor advise account closure?

Thanks for the reply eskbanker. We never actually got as as far as a completion date. To cut a long story short it was a new build property and there were problems which kept appearing once previous ones had been rectified. Very frustrating, I've missed out reopening the ISA by two weeks, but I'll get over it!

eskbanker

Simonm said:

eskbanker said:

You're right that the passage of 12 months removes any rights to reopen a HTB ISA - how far in advance of anticipated completion date did your solicitor advise account closure?

Thanks for the reply eskbanker. We never actually got as as far as a completion date. To cut a long story short it was a new build property and there were problems which kept appearing once previous ones had been rectified. Very frustrating, I've missed out reopening the ISA by two weeks, but I'll get over it!

The reason for asking about timescales was that if your conveyancer advised you to close the account way too early (instead of the two weeks ahead of completion generally recommended) then you could argue that your loss is due to their flawed advice and therefore that they should be prepared to accept at least some of the liability arising from that....

Simonm

eskbanker said:

The reason for asking about timescales was that if your conveyancer advised you to close the account way too early (instead of the two weeks ahead of completion generally recommended) then you could argue that your loss is due to their flawed advice and therefore that they should be prepared to accept at least some of the liability arising from that....

Ah - yes don't think I could argue that - will start saving now to replace the bonus! Thanks again for coming back to me.

ljy94

Hi there,
I’m looking for some advice. Myself and my partner are both first time buyers and have had an offer accepted on a house. We both have Help To Buy ISAs and including the government bonus will have a £25,000 deposit. However, we are confused about how and when we can use the bonus. As far as we can see, we will have to use our savings (excluding bonus) at exchange and then use the bonus at completion to make up the rest of the deposit. For example, we pay £20, 000 at time of exchange and then our bonus of £5,000 when it becomes available at time of completion. Or will we need to find a way to make up our full deposit to pay at exchange and if this is the case, will we get the money back through the government bonus?
I hope this makes sense. We have struggled to get a clear answer from our mortgage lenders and solicitor.

eskbanker

ljy94 said:

Hi there,
I’m looking for some advice. Myself and my partner are both first time buyers and have had an offer accepted on a house. We both have Help To Buy ISAs and including the government bonus will have a £25,000 deposit. However, we are confused about how and when we can use the bonus. As far as we can see, we will have to use our savings (excluding bonus) at exchange and then use the bonus at completion to make up the rest of the deposit. For example, we pay £20, 000 at time of exchange and then our bonus of £5,000 when it becomes available at time of completion. Or will we need to find a way to make up our full deposit to pay at exchange and if this is the case, will we get the money back through the government bonus?
I hope this makes sense. We have struggled to get a clear answer from our mortgage lenders and solicitor.

The bolded wording is the correct interpretation and corresponds with what's explained in the MSE HTB article at https://www.moneysavingexpert.com/savings/help-to-buy-isa/#accordion-content-0507561923-4

jaymAFC

Hi everyone. Help pls!!!
I've got an HTB ISA & am placing offers on houses trying to beat the stamp-duty break closing in March. I want to purchase a place (on my own) for more than the £250,000 threshold. I was recently informed I am not eligible for government support with a purchase price at £350,000. Now I am thinking of changing my HTB ISA into a Lifetime ISA to become eligible for government assistance, but I read that you need to leave your funds in the account for 12months. Surely I can use the start date of my HTB ISA (years ago) to ensure I qualify? Or is it as black and white as the start date of the LISA opening? Natwest do not provide a LISA now so I'd have to change to a different bank to open a LISA. All very disappointing. 
Thanks for your assistance. 
Jay

bowlhead99

jaymAFC said:

I've got an HTB ISA & am placing offers on houses trying to beat the stamp-duty break closing in March. I want to purchase a place (on my own) for more than the £250,000 threshold. 

Ok, so assuming the property is outside London, you won't be able to get a HTB ISA bonus, based on the £250k property limit maximum which has been in place since the HTB ISA was launched five years ago, two thousand posts earlier on this thread.

I was recently informed I am not eligible for government support with a purchase price at £350,000

You'd have been informed of that whenever you read the product rules at any point over the last five years.

Now I am thinking of changing my HTB ISA into a Lifetime ISA to become eligible for government assistance, but I read that you need to leave your funds in the account for 12months

That's correct. If you're already making offers, the product won't be any use to you to buy a property with the bonus because you can't do that within the first 12 months of having the product.

If you had opened the LISA a year ago you'd have been fine. If you'd have opened it in the 2017/18 tax year you could have contributed at least £16k into it and had £4k of bonuses by now. But as you didn't, you haven't, and it's too late to fix unless you're willing to postpone buying for 12 months to get a couple of thousand of bonus.

Surely I can use the start date of my HTB ISA (years ago) to ensure I qualify? Or is it as black and white as the start date of the LISA opening? 

It's black and white. They're different products and you haven't had a LISA for 12 months. There was a limited window of time to transfer existing HTB balances into the new LISA product when it was launched in 2017/18, but they're otherwise unconnected. 

All very disappointing. 
Thanks for your assistance. 

No problem. Next time you're looking to get free money towards something important (property purchase, retirement, whatever), read the rules before pinning your hopes on it, to avoid disappointment.