Rejected Help To Buy ISA - Advice Please

kaybee_

I have recently closed my Virgin money help to buy ISA account.

This account was closed on the 18th July, with my settlement date for my property being on the 21st July.

After applying for my closure statement on the 18th, I did not receive this letter until after my settlement date. This was returned to my solicitor on the 24th July where I also signed my first time buyer declaration. 

My bonus claim has been rejected on the basis that the settlement of the transaction has already taken place. 

From my understanding, as long as the ISA account was closed prior to the property settlement date, I should be able to claim my bonus up to 12 months after closure date.

Is this correct?
Does anyone have any advice as to how I can claim my bonus? 

eskbanker

While you're correct that the bonus must be claimed within 12 months of account closure, it must also be claimed before the purchase is completed, in order to satisfy the declaration that the proceeds will be put towards the purchase, so conveyancers should be advising their clients to allow a couple of weeks, not three days.  If your purchase had settled on 21 July then you couldn't truthfully declare yourself not to have owned a property on 24 July - did you discuss the timings with your solicitor?

kaybee_

eskbanker said:

While you're correct that the bonus must be claimed within 12 months of account closure, it must also be claimed before the purchase is completed, in order to satisfy the declaration that the proceeds will be put towards the purchase, so conveyancers should be advising their clients to allow a couple of weeks, not three days.  If your purchase had settled on 21 July then you couldn't truthfully declare yourself not to have owned a property on 24 July - did you discuss the timings with your solicitor?

These timings were not discussed no. 

From my understanding, I thought the ISA account only had to be closed before the purchase was complete. I was not aware that the bonus had to be claimed before the purchase was complete.

My solicitor was aware that I did not have the closure letter before the settlement date. They advised that they would need the full deposit amount from myself before the date which I provided and then they could make the claim request following receiving the closure letter. 

eskbanker

kaybee_ said:

eskbanker said:

While you're correct that the bonus must be claimed within 12 months of account closure, it must also be claimed before the purchase is completed, in order to satisfy the declaration that the proceeds will be put towards the purchase, so conveyancers should be advising their clients to allow a couple of weeks, not three days.  If your purchase had settled on 21 July then you couldn't truthfully declare yourself not to have owned a property on 24 July - did you discuss the timings with your solicitor?

These timings were not discussed no. 

From my understanding, I thought the ISA account only had to be closed before the purchase was complete. I was not aware that the bonus had to be claimed before the purchase was complete.

My solicitor was aware that I did not have the closure letter before the settlement date. They advised that they would need the full deposit amount from myself before the date which I provided and then they could make the claim request following receiving the closure letter. 

The point of the scheme is that the HTB money, and the bonus in particular, needs to form part of that deposit, but if your solicitor told you that they could claim the bonus after completion then it sounds like you may have a negligence claim against them for inaccurate advice, so you need to discuss the matter further with them.

Edit: the conveyancer guidelines document is clear about this:

The submission of an application for the Bonus to be paid should take place in anticipation of the completion of a housing transaction. The time taken to close a Help to Buy: ISA account, together with the processing and payment time required by the Scheme Provider will be at least 12 business days in most circumstances. Therefore, Eligible Conveyancers should commence the process with this timeframe in mind.

masonic

The fact that the bonus must be used at completion towards the purchase price of the property is quite prominent in information about these accounts.