This is a freeview guide to Help to Buy ISAs.

The 'Help to Buy ISA' was launched on 1st December 2015. It is a new account aimed at helping first-time buyers to save up for the deposit on their home. It closed to new applicants in 2019.

An Individual Savings Account (ISA) is a tax-free savings account: people may save up to their ISA limit each year. The difference between a Help to Buy ISA and other cash ISAs is that with Help to Buy the government pays savers a bonus of 25% of the account balance when it is closed and the funds may be used to buy a home.

It was announced by the Chancellor in his March 2015 budget. Accounts closed to new applicants on 30 November 2019. Most high-street banks offered the account.

Main features

  • Individuals who are 16 years old or over, can save up to £200 every month. There is no minimum deposit.
  • In the month that the account is opened an additional £1,000 can be saved.
  • The government's bonus is calculated at 25% of the account balance including interest.
  • The maximum bonus is £3,000 per account, achieved on savings of £12,000 or higher. 
  • The bonus is available on properties costing up to £450,000 in London and £250,000 outside London.
  • The bonus is only paid when the account is closed. The solicitor or conveyancer will apply for the bonus and this must be done within 12 months of closing the account.
  • The ISA cannot be used to build up a deposit payable on exchange for a home as the money can only be withdrawn and used for purchase at completion. It cannot be used for solicitors' or estate agents' fees.
  • Money can be withdrawn from the account at any time, but can only be put back within the monthly deposit allowance.
  • So far, no end date has been announced so there is no set limit to the amount that can be saved.
  • Accounts could be opened up until 30 November 2019 and any opened prior to this date can still accept deposits. The bonus scheme is set to keep paying out savings until December 2030.
  • Accounts are limited to one per person rather than one per home, so joint purchasers can both receive a bonus.
  • From 1 February 2016 savings withdrawn from an account can be reinvested if an intended house purchase does not proceed, without the replacement counting toward the annual subscription limit.

See HMRC's factsheet Help to Buy: ISA factsheet.

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