What you might not know about Help to Buy schemes

When it comes to securing your dream home and planning for your future, understanding the various financial products available can be crucial.

While government bonuses are available to help first-time buyers, their applications and benefits differ. Here, we’ll break down the key aspects of each and how Gilson Gray can assist in the process.

From April 2013 to March 2023, the Help to Buy ISA was specifically designed for first-time buyers, providing a government bonus to boost your savings when purchasing your first property. When the time came to use the Help to Buy ISA, funds in the account were transferred, and your solicitor would claim the bonus upon submitting the relevant claim, based on how much you had saved up to a cap of £12,000 per ISA with a government bonus of up to £3,000.

While you can no longer apply for a Help to Buy ISA, those that already have a Help to Buy ISA in place can pay into it until November 2029, and claim the bonus until November 2030.

Current prospective buyers can instead utilise The Low-Cost Initiative for First Time Buyers (LIFT) scheme which opens annually for applications in conjunction with government budgets. The LIFT scheme means that the buyers will pay for a percentage of a property’s total cost (60-90% depending on the type of LIFT scheme being used) with the Scottish government holding the remaining share.

It is important to note that when it comes to remortgaging, certain Help to Buy schemes such as the Help to Buy Equity Loan can impact the remortgaging process and require solicitor engagement to ensure that the process is smooth and seamless.

The Lifetime ISA offers greater flexibility in comparison to the other schemes available. It can be used not only to purchase your first home but also to save for later life, such as retirement. The government bonus for the Lifetime ISA is typically added directly to the ISA when funds are deposited.

When the funds are withdrawn to purchase a first home, the full amount in the ISA, including any government bonuses, is transferred to the solicitor handling the purchase. Alternatively, clients can opt for a partial withdrawal, leaving the remaining balance in the ISA to continue growing. This option allows the ISA to remain open, and clients should check with their provider to see if they can continue to receive government bonuses if they keep saving for later life.

It is worth noting that a Lifetime ISA must be open for more than 12 months before any withdrawal is made to avoid withdrawal charges. Gilson Gray can guide clients through the withdrawal process for Lifetime ISAs and assist in claiming the government bonus for Help to Buy schemes. Our expertise ensures that all conditions are met, helping you navigate the complexities of these financial products.

It’s important to be aware that our fees at Gilson Gray vary on a case-by-case basis, depending on the specifics of each purchase. Additionally, Help to Buy schemes and Lifetime ISA’s have maximum limits on the amount of bonus payable by the government and being informed of these limits can help you plan your finances more effectively. There are lots of resources available online but if you are ever in doubt, you can always reach out to a member of the Gilson Gray team for advice.

It’s no secret that navigating the financial landscape of purchasing a home, whether as a first-time buyer or when remortgaging, can be challenging. Gilson Gray is here to help you through every step of the process, ensuring that you make the most of your savings and secure your financial future.