Help To Buy ISA Process
Following on from my colleague’s article in January of this year; “New Government Scheme won’t leave you dISAppointed” we are now seeing some clients who have taken advantage of the Help to Buy ISA Scheme and the benefits which come from it.
How the Help to Buy ISA works
The basic idea of the Help to Buy ISA is that First Time Buyers can open one with any of the nominated banks who are authorised to deal with this part of the Government initiative. Savers are able to make a one-off maximum initial deposit of £1,000.00 to open the account and then save up to £200.00 per month into the ISA. There is, however, an upper limit on the amount that can be saved in this account of £12,000.00 and savers will not be able to deposit more than this into the account.
If the sum of at least £1,200.00 is accumulated in the ISA prior to it being closed, the Government will then provide a bonus of 25% of the sum saved. This means that the amount of the bonus increases with the amount of the monies saved in the ISA.
How to claim the Help to Buy ISA
In order for the Government bonus to be claimed, your solicitor will need to have a copy of a statement of the Help to Buy ISA account which will confirm that the account has been opened under this scheme. If the statement does not have this stated on it, it is unlikely to be a Help to Buy ISA; you may find your solicitor queries this with you, just to be clear in their own minds as to what the next steps may be.
Once you have provided your solicitor with the copy ISA Statement, if the sum deposited is over £1,200.00, your solicitor will ask that you close the account and provide them with a copy of the Closing Statement or letter from the bank. We are told that, in their usual swift fashion, the banks can take up to 7 days to produce this, so you should make sure that the time scales for exchange and completion reflect this.
Your solicitor will then provide you with a First Time Buyer’s Declaration, which is a form that is available only from the Government Help to Buy Scheme. This form confirms that each individual is a first time buyer, together with the details of the property they are buying and the price being paid. The solicitor will ask you to complete the form and return it to them, alongside the closing statement from the bank.
Once contracts are exchanged and a completion date is set, your solicitor will submit a copy of the Closing Statement and the First Time Buyers Declaration to the government website and request the bonus monies be released. Once submitted, it can take up to 24 hours for the submission and request to be accepted and an email will be sent to your solicitor confirming they have received it.
This email confirms that the bonus monies will be released to your solicitor within 3 days of the date of the email; again, it is a fairly drawn out process and the completion date set should take this into account. Unfortunately, it is no longer possible to draw down the bonus monies before exchange takes place; presumably this is to ensure that all bonus monies can only be used as part of the purchase price and for no other fees or disbursements.
Did we mention previously that the bonus monies can only be used for the purchase price and nothing else?
You also cannot use the bonus monies as part of the deposit on exchange of contracts. This is something to keep in mind, as it may impact on the completion monies required from you as the buyer, depending on how this is broken down in the final analysis.
Once completion has taken place, your solicitor will send you a letter from Her Majesty’s Government, which confirms that you have received the Help to Buy ISA bonus.
And that, in a nutshell, is the process of obtaining a Help to Buy ISA bonus; first you pay into the ISA, then you close it and your solicitor claims your bonus on your behalf.
If you are interested in utilising the Help to Buy ISA and are a first time buyer then Talk to Tollers. We will be able to guide you through this rewarding process, call 01604 258558.