From November 2019 first time home buyers will no longer be able to consider opening a Help to Buy ISA account to incentivise them to save for the deposit on their first home, although existing holders of a Help to Buy ISA account will have until 2030 to utilise the government bonus.
The alternative to the Help to Buy ISA for first-time buyers will be to open a Lifetime or ISA account (or “LISA” as the scheme is often referred to).
LISA will enable individuals aged between 18 to 39 to save tax-free. Savers may either use the savings for the purchase of their first home, or they can continue to save and withdraw their savings on attaining the age of 60.
Savers may invest up to £4,000 a year and enjoy the benefit of a 25% bonus payable by the state. The bonus is paid to savers from the ages of 18 to 50 meaning that savers can benefit from a bonus payout of up to a maximum of £33,000.00!
If the saver utilises the LISA for the purchase of their first home, there are a number of steps the Bank or Building Society requires the saver to address before releasing the funds – to include details of the conveyancer instructed in the purchase transaction.
To claim the government bonus, the saver will be required to complete a set of forms, and their conveyancer will make an application to the Bank or Building Society to ensure that the funds will be available in time for the purchase transaction to complete. Savers are therefore advised to instruct a conveyancer who is well-versed with the requirements of the scheme to avoid any delays arising in the application for the bonus.
Wolferstans Solicitors has a team of specialist lawyers with a wealth of experience in dealing with many of the government schemes that aim to incentivise home ownership (for example the Help to Buy Equity Loan and Shared Ownership Scheme) including LISAs, they would be delighted to hear from you if you need guidance in buyer your new home.