Help to Buy ISA guide

Liz_Coggins

If I get a help to buy ISA and then buy a house that is too expensive to be covered by the scheme, can I continue to pay into and earn interest on my help to buy ISA or will I have to close it or transfer it elsewhere? I would obviously like to stay to get the 4% interest rate Halifax are offering even though I would miss out on any money from the government towards the house.

Archi_Bald

No problem, you don't have to ever apply for the bonus, and you don't have to close your HTB ISA when you buy your first place. There's no guarantee that your interest rate will always be at least 4% though as the rate is variable.

Kaytee33

Hi Archi,

Are you sure? I just called Halifax about this very issue and they said that once you own a home and are no longer a first time buyer you are no longer an "eligible customer" for this ISA and so you have to close your HTB ISA whether you've used that money to help pay for your house or not - and that HMRC will know!

Archi_Bald

There is nothing I have seen in the Halifax HTB ISA T&Cs nor in the Scheme Rules published by the Treasury that says the HTB ISA must be closed when the ISA holder acquires a property. May be you could ask Halifax to show you the relevant clauses?

You must be eligible (i.e. be a first time buyer) when you open the ISA and when/if you apply for the bonus, but there is no obligation for ongoing eligibility. I also very much doubt anyone would do any ongoing eligibility check. HMRC, and/or their administrator UKAR, will not object to you holding an ISA as long as you don't exceed your allowance, and they will only check your eligibility when you claim the bonus.

As an aside, as has been mentioned all over, the attraction of the HTB ISA is the bonus, not the interest it pays, not even at Halifax. So if you know you don't want the bonus, save somewhere where you get better interest, and where you aren't restricted to £200 a month.

fuzzgun19

Just read this on the Halifax site.

• Your bonus is paid on purchase of a property up to the value of £250,000 outside London and £450,000 inside London

I thought you could just use this as a savings account and didn't have to buy a property?

jimjames

fuzzgun19 wrote: »

Just read this on the Halifax site.

• Your bonus is paid on purchase of a property up to the value of £250,000 outside London and £450,000 inside London

I thought you could just use this as a savings account and didn't have to buy a property?

Where does it say you have to buy a property?

Archi_Bald

fuzzgun19 wrote: »

I thought you could just use this as a savings account and didn't have to buy a property?

You will not get any bonus if you don't meet the bonus rules, which include the purchase price of your property, amongst others.

As I just posted, if you don't want to / cannot use the Help To Buy ISA for it's intended purpose, there are better accounts around to save money in.

MARTYM8`

fuzzgun19 wrote: »

Just read this on the Halifax site.

• Your bonus is paid on purchase of a property up to the value of £250,000 outside London and £450,000 inside London

I thought you could just use this as a savings account and didn't have to buy a property?

The Halifax pays the 4% interest.

The government funds the 25% bonus on your HTB isa funds. This is applied for by your solicitor and the Halifax has no role in this transaction for the bonus.

Halifax want your HTB isa funds solely because once they have potential first time buyers as savings customers they assume they will be more likely to take out a mortgage with them - that's where they will really make their money! But you can take out a mortgage with any one of course.

kirsty135c

Hello,

A great article but I just want to double check something...

This year I opened a 'Cash ISA' and have £12, 000 saved in it. I want to open a 'Help to Buy ISA'. Can I open this second ISA this financial year or should I wait until April?

You talk about a split ISA, does this mean I can open both and put £3000 into a 'Help to Buy ISA' (the Halifax one sounds great) because I understand I have not reached my annual allowance yet?

Thank you very much!

Hazza77

Hi guys,

I have read through the forum to try and find an answer, but I'm still unsure!

I have opened a H2B ISA for myself, but I am thinking about opening one for my other half as well. The issue is she already has a cash ISA. She didn't open it this year, and only actually uses it as a second bank account, rather than an actual savings account. So money gets transferred in and out on a regular basis.

Would she be able to open a regular H2B ISA? Or would it have to be a split one?

Any advice would be greatly appreciated!