Help to buy isa + shared ownership

robboa

Probably a stupid question but if you have a help to buy isa and the property share you're buying is less than 250k but the actual property is worth over 300k are you eligible for government bonus

robboa

bump

[Deleted User]

Generally no.

The "open market value" (i.e. 100% share)  must be under the cap - see https://www.helptobuy.gov.uk/help-to-buy-isa/faq/#price-cap-shared-ownership

There is a clause which states "...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."

I'd imagine that's only worthwhile if you are borderline - e.g. if you were buying 50% for £127,500, you'd be over based on the full value, but the NPV method may not be.

If you think this may be an issue, but you aren't buying immediately, have you thought about moving it to a Lifetime ISA? LISA has a much bigger limit.

The LISA needs to have been open 12 months before you can withdraw without paying the 25% charge though. And any transfer will use you tax year's £4k allowance (so quick if you want to use 19/20's!)

RobertKr

I had the same problem before (property worth 272k, 2 htb isa accounts with aroung 20k saved, was aiming for 55% of shared ownership, 125 years long lease, 2.75% rent) and after chasing some information on the internet and contacting htb loan/shared ownership agent I had a replay that I can use isa as long as NPV value of not owned part take whole value of the property belove 250k.
At the end, I decided to buy another property on the same development with HTB loan (275k price, slightly better plot, the same type of a house), even after losing 5k bonus in the long term (5 years with htb loan vs 5 years paying rent for shared ownership, plus mortgage rate was 2.14% for 2 years fix SO and 1.56% for 5 years fix HTB loan) it is more beneficial financially. Shame the limit on ISA is lower outside London then on LISA.