On Tuesday 8 December 2015 the Government will launch a new initiative to help first time buyers get onto the property market. This will allow first time buyers to build up a deposit in a Help to Buy ISA. The initial deposit can be up to £1,200 and this can be followed by monthly instalments of up to £200 a month. The Government will provide a tax free top-up bonus of 25% of the amount saved up to a maximum amount of £3,000. So someone who saves £12,000 will get an extra £3,000 making a total of £15,000.
The new ISA will be available to individuals rather than households so both partners could save into individual Help to Buy ISA’s. This will mean that they can get bonuses worth up to £6,000 and build up a deposit which would total £30,000.
To get as far as receiving the maximum £3,000 Government contribution will take 5 years and there are several other rules that need to be complied with. This is still valuable help for first time buyers especially as the fund will earn interest on the money tax free as well. Further details of all the regulations can be found at http://www.helptobuy.gov.uk/help-to-buy-isa/faq
As always you can contact Nigel Reynolds of Reynolds and Co by email at firstname.lastname@example.org or by telephone on 07885490484 to discuss the above or any other tax matters.