From 1 December 2015 a new type of ISA was made available to help first time buyers save for a deposit.
The March 2015 Budget announced the Help to Buy ISA. The scheme works by providing a government bonus to each person who has saved into a Help to Buy ISA at the point they use their savings to purchase their first home. For every £200 a first time buyer saves, the government will provide a £50 bonus up to a maximum bonus of £3,000 on £12,000 of savings. Savers will have access to their own money and will be able to withdraw funds from their account if they need them for another purpose but the bonus will only be made available for home purchase.
Some important points are listed below:
- It will only be possible for a saver to subscribe to one cash ISA per year. It will therefore not be possible for an account holder to subscribe to a Help to Buy: ISA with one provider, and another cash ISA with a different provider.
- The government bonus can only be used towards a property that is being used for the first time buyer to live in as their only residence and not buy-to-let. This will be enforced by the scheme administrator.
- Accounts are limited to one per person rather than one per home so those buying together can both receive a bonus
Further details can be found here.