Help to Buy ISA guide

jamestolly

Hi there. Im in the process of buying a flat and have saved up 11,600 into the account. I believe it may complete just before my interest in the account is due, for which I recieved £200 last year. Is it worth delaying until the interest comes in or will i get the interest even if the money is transferred out of the account before the interest date?

eskbanker

jamestolly said:

Hi there. Im in the process of buying a flat and have saved up 11,600 into the account. I believe it may complete just before my interest in the account is due, for which I recieved £200 last year. Is it worth delaying until the interest comes in or will i get the interest even if the money is transferred out of the account before the interest date?

If you close the account before the scheduled interest payment date, you'll get your interest on a pro rata basis, i.e. if you close it a month before scheduled interest date, they'd pay out at 11/12ths of the annual rate.

jaymAFC

bowlhead99 said:

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.

Thanks. Brutal honesty. I am still able to transfer my HTB to a LISA - the only issue is the 12month wait for the purchase. I was hoping some establishments would allow me to carry over the duration I've had my HTB into my LISA, thus negating the 12month wait.... wishful thinking I guess. 
Raised a complaint with the bank about not being made aware of £250,000 threshold, but it was quickly rebuffed on account of the T&Cs being in place. Bummer! 

Alexland

jaymAFC said:
I am still able to transfer my HTB to a LISA - the only issue is the 12month wait for the purchase.

You can only transfer up to £4k of the HTB ISA into a new LISA each tax year although there was a transitional arrangement where in the first year LISAs were available they allowed a transfer of the full HTB ISA value even if it exceeded £4k. The 12 month rule is set by government policy so the same across all providers.

Emzb91

I have just started looking at Help To Buy houses outside the London area, I realise the cap is £200,000 , however the houses I am looking at are around £330,000. I just want to check how this works please? 

Alexland

Emzb91 said:

I have just started looking at Help To Buy houses outside the London area, I realise the cap is £200,000 , however the houses I am looking at are around £330,000. I just want to check how this works please? 

The HTB ISA cap outside London is £250k so if you have this obsolete product you would just withdraw your money without getting a bonus to use towards the £330k purchase. That doesn't stop you taking advantage of other parts of the Help To Buy scheme which I believe are still running although the people in the House Buying forum would be better placed to answer questions.

https://www.helptobuy.gov.uk/

https://forums.moneysavingexpert.com/categories/house-buying-renting-selling

If you can wait a year before buying you might want to look at the Lifetime ISA which goes up to £450k nationwide.

https://www.gov.uk/lifetime-isa

caroldhill

Can a grandparent pay into a grandchild’s help to buy ISA

eskbanker

caroldhill said:

Can a grandparent pay into a grandchild’s help to buy ISA

Yes, subject to any restrictions at individual product level (I could be wrong but seem to recall some only allowed one payment per month, for example).

Rodders0853

My daughter is looking to buy a shared ownership house and the landlord is the MK Council. Can she use her Help to Buy ISA towards the purchase. Some of the lenders her mortgage advisor have gone to are saying she can't because of some 2015 act. Can you clarify please.

Alexland

Rodders0853 said:

My daughter is looking to buy a shared ownership house and the landlord is the MK Council. Can she use her Help to Buy ISA towards the purchase. Some of the lenders her mortgage advisor have gone to are saying she can't because of some 2015 act. Can you clarify please.

Without knowing their specific concern it's hard to comment but generally HTB ISAs can be used for Shared Ownership subject to the £250k price cap (or £450k in London) based on the the full property value and all other normal product conditions:

https://www.helptobuy.gov.uk/help-to-buy-isa/faq

Are shared ownership properties eligible for a government bonus?

Yes, if all the other scheme eligibility criteria are met.

What is the property price cap for shared ownership schemes?

In the context of shared ownership properties the price cap applies to the full sale price of the property rather than just the share you initially buy. For shared ownership properties the full sale price is a multiple of the equity share you are buying. In practice this means that if you are purchasing a 25% equity share of a property for £50,000, the full sale value is £200,000. Alternatively, your conveyancer can calculate the sale price based on the price paid for the equity share you are buying plus the net present value of rental payments due over the term of the lease.

You should speak to your solicitor or conveyancer and they will be able to advise you on whether the property you are purchasing is within the price limit and is eligible for a government bonus.