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Help to Buy ISA – First Time Buyer

home in the UK

The difficulties of buying property in today’s market is never far from the news’ headlines. Opinions are many but solutions appear hard to come by, at least in terms of those capable of helping more than a very small subset of affected individuals or families.

One of the latest initiatives is the government’s Help to Buy ISA. The scheme allows those saving for their first home to put their money into a Help to Buy ISA and, in return, the government will boost their savings by 25%. However, the maximum government bonus available is £3,000. Sceptics have already questioned whether this relatively low limit will mean that the scheme is of limited to value to many would-be buyers, particularly those in property hotspots where prices outstrip average salaries by many multiples. Help to Buy ISAs can be used for any property costing under £250,000 (or £450,000 in London) and with any mortgage.

Christopher Furbey from Manchester based law firm Clifford Johnston & Co provides information and answers questions below on the Help to Buy scheme.


The scheme is open to any UK resident who is 16 or over and has a valid National Insurance number, provided that they are a first-time buyer and do not have another cash ISA active in the same tax year. Note that the first-time buyer restriction also excludes anyone who owns a property outside the UK.

I’ve already paid into a cash ISA this year. Does this mean I have to wait until the next tax year before I can take out a Help to Buy ISA?
Not necessarily. You could transfer your active cash ISA into a Help to Buy ISA. However, you can transfer a maximum of only £1,200 of your active cash ISA balance. You must transfer balances in excess of this into a stocks and shares ISA, an Innovative Finance ISA, a Lifetime ISA or a non-ISA account – but the total amount cannot exceed the annual ISA subscription limit. Another alternative is to choose a portfolio ISA. This will enable you to hold multiple ISA products within the same cash ISA “wrapper”. Again, annual ISA subscription limits apply.

I’m buying with my partner. Can we take out separate Help to Buy ISAs?
Yes. The Help to Buy ISA is available to individuals not households. This means that two people who are planning to buy a property together can both take out separate Help to Buy ISAs and use them to help finance the same property purchase.

How much can I save per year?
You can save a maximum of £1,200 in your first month and up to £200 per month in subsequent months.

I’ve opened a Help to Buy ISA. How do I get my government bonus?
As you get close to buying your first home, you must instruct your legal adviser to apply for your government bonus. The sum received will then be added to your property purchase fund.

What exactly may I use my government bonus for?
You must consolidate it with the funds to be transferred at the completion of the transaction. It is not permitted to use it for the deposit at exchange of contracts, or to pay for legal or estate agent’s fees or for any other costs associated with the property purchase.
What if I change my mind and decide not to buy a property?
You can withdraw the money from your Help to Buy ISA whenever you want. If you choose not to use it towards a property purchase you will no longer be eligible to receive the government bonus but you will still benefit from the interest due and the tax-free nature of the product.

Anyone considering taking out a Help to Buy ISA may benefit from the services of an independent financial adviser and legal advice.

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