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The new help to buy ISA will be available from 1st December 2015. This ISA will allow people aged 16 and over to save up to £200 per month, on top of an initial investment (up to £1,000), towards a deposit on a first property purchase.
Where an individual saves £12,000 into the help to buy ISA, the government will boost those savings by 25% to £15,000 when used for a deposit on the purchase of a first property. The tax free bonus will be limited to a minimum of £400 (maximum of £3,000) and will be available on UK properties up to a value of £450,000 in London and up to £250,000 in other parts of the country.
Because the help to buy ISA is per individual and not per property, if a couple save a deposit of £24,000 equally between them, they would receive an additional £6,000 from the government. Each first time buyer can only open one help to buy ISA during the lifetime of the scheme.
Payments made to a help to buy ISA count against the individuals annual limit and because it is effectively a cash ISA it means that another cash ISA cannot be opened. However, a stocks and shares ISA could still be opened, into which you could invest into cash following recent ISA reforms.
The new account will be available for 4 years from 1st December 2015, but there is no limit on how long the account can remain open.
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