First time buyers with help to buy isas in Scotland

NathanBrown123

Hi folks,

So the situation is we are a couple with a young child looking to get on the property ladder with our first home, in the hopeful not too distance future (year or so).

My first question is:

I have a help to buy isa and my partner has her own LISA account, can you both use your gov bonus towards the house deposit from your own help to buy isas? I am a little confused on this as I read somewhere that you could not, and i've read saying you can.

My second question is: would I be better off with a LISA? My thinking is that with a LISA you have the bonus paid in monthly, as long as you pay in monthly, however with my help to buy isa, I do not get this bonus for the home exchange deposit, it is only after for the mortgage deposit i get it. I am aware you need to have a LISA open for a year before it is used for a house deposit, which would suit us fine.

Is there any advantage to keeping my help to buy isa over opening a lifetime isa and transferring everything over?

Anyway, i'm just looking for some general advice on this topics from people more experienced than myself.

Thanks

grumiofoundation

One person can use LISA and one HTB ISA for the same purchase but the property must fulfil the criteria of both schemes (e.g. cost less than 250k outside London).

How much do you have saved in HTB ISA? Unless you will get a bigger bonus from HTB ISA I can't see why not use LISA instead.* (*with caveats re LISA scheme rules - pay penalty if withdraw for non-house purchase).

Between now and next August you can have contributed £8000 - so getting 2 x £1000 bonus.
If you don't buy before April 2023 thats another £4000, making £12000 (total of £3,000 bonus - same as HTB max. bonus).

Because the LISA contribution limits are per tax year, not monthly like HTB ISA, what you could do is open today with minimum deposit, e.g. £1 - to get 12-month clock ticking.

Then you have until march to pay the remaining LISA allowance in - £4,000 - initial deposit. This way if anything changes between now and march, you think you might buy before your 12 months is up you have locked money away and have to pay penalty if you need to access it and you can keep contributing to HTB ISA in meantime so that option is available.

You don't have to close, or stop contributing to HTB ISA in order to open lifetime ISA.

MeticulousMark

Hi Nathan,
            We bought two years ago in Scotland both with a HTB ISA and both used ours so you can. Nothing to add to grumi's answer - there's quite a few variables about HTB ISA vs LISA, we just made a spreadsheet to try to figure out which would make us more more. Much of it is to do with timings.

I wanted to quickly clarify something though, it nearly tripped us up - in Scotland there is no two stage deposit system, i.e. home exchange vs mortgage deposit. That's an issue with HTB ISA's in England but isn't here (although you will get confused because all the stuff online is for the English system). You only pay one deposit, basically at the point of getting the keys. Your solicitor will tell you how it all works and sort out the HTB money, it's straight forward.