Since 1 December 2015, first-time home buyers have been able to save in a Help to Buy Individual Savings Account (HTB ISA) where the government adds money to the pot.
As with a traditional cash ISA, the interest earned will be free of income and capital gains tax. In addition, when savers take money out to buy a residential property, the government will add 25 per cent to whatever is in the account, up to a maximum of £3,000.
To be eligible, buyers have to be a UK resident and a first-time buyer. The property must be purchased with a mortgage and it cannot be a second property or bought for buy-to-let purposes. Furthermore, the maximum purchase price permitted is £450,000 in London or £250,000 for the rest of the UK.
The government will add 25 per cent to the account at the point buyers choose to purchase a property, up to a maximum of £3,000 for buyers that have saved £12,000. The money is paid following the solicitor’s or conveyancer’s application following a property purchase.
HTB ISAs will be available until 30 November 2019 and bonuses must be claimed by December 2030.
Link: Help to Buy ISA