Saving money in order to get on the property ladder may be done in a whole host of ways, and for some eligible savers, this could include getting a bonus from the from government. The Help to Buy ISA and Lifetime ISA both offer a 25 percent bonus on savings – although the rules between the two differ.
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While the Help to Buy ISA is no longer open to new savers, those who do have an account have until November 30, 2029 to save into one.
After this deadline, first-time buyers have a further 12 months to claim their bonus – until December 1, 2030.
In order to get the bonus, a person must have saved at least £1,600 in a Help to Buy ISA.
Then, 25 percent of the savings up to a maximum bonus of £3,000 can be added.
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Help to Buy ISA: The property must be bought with a mortgage, according to eligibility rules (Image: GETTY)
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In order to receive the maximum bonus, £12,000 must have been saved in this account.
To get the Help to Buy ISA bonus, the first-time will need to instruct their solicitor or conveyance to apply for it, when they are close to buying the first home.
Once the solicitor or conveyancer receives the government bonus, it will be added to the money the buyer is putting towards the first home.
The Help to Buy section of the government website explains: “The bonus must be included with the funds consolidated at the completion of the property transaction.
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“The bonus cannot be used for the deposit due at the exchange of contracts, to pay for solicitor’s, estate agent’s fees or any other indirect costs associated with buying a home.”
First-time buyers who are using the Help to Buy scheme may wonder whether there will be a charge for the processing of their government bonus application.
The Help to Buy guidance on the government website explains that there may be a charge – however there is a limit as to how much this can be.
The maximum they can charge is £50 plus VAT.
Help to Buy ISA: A solicitor or conveyancer cannot charge more than £50 VAT to process the bonus application (Image: GETTY)
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“Your solicitor or conveyancer cannot charge more than £50 + VAT to process your bonus application,” the guidance explains.
The Money Advice Service also explains this additional charge.
The website says: “It’s worth noting you need to claim your bonus through your solicitor or conveyancer before completion, but after exchange of contracts, which might be subject to a maximum fee of £50 plus VAT.”
There are a number of eligibility rules when it comes to qualifying for the government bonus.
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In order to get it, the property a person is buying must:
Be in the UKHave a purchase price of up to £250,000 (or up to £450,000 in London)Be the only home the buyer will ownBe where the buyer intends on livingBe purchased with a mortgage.