Sammie Ellard-King
I’m Sammie, a money expert and business owner passionate about helping you take control of your wallet. My mission with Up the Gains is to create a safe space to help improve your finances, cut your costs and make you feel good while doing it.
If you opened a help to buy ISA with the idea of saving towards buying your first home, you’ve probably been putting money into the account for some time.
The help-to-buy ISA scheme is great for getting a house deposit together and earning a bonus towards you buying your first home.
Whilst you might have had this account open for some time, it could be that you are now at the point where you want to buy a property and move in.
How can you access the money and how do you get your hands on the Government bonus? Let’s look at how to close a help to buy ISA.
Table of Contents
How to close a help to buy ISA?
If you have started to process of buying your first home, you’ll have a lot on your mind. You must remember to speak to your help to buy ISA provider when you are close to completion.Â
Don’t just withdraw the money and use it, or you’ll miss out on the bonus!Â
You need to ask your provider to close the account. Closing a help to buy ISA can be done in a branch, on the phone or online, depending on who you opened it with.Â
The bank will send you a help to buy ISA closing statement letter within seven days that you will need to pass to your solicitor.Â
Your solicitor will handle and funds and will also apply for the Government bonus of 25% up to £3000. The bonus needs to be applied for within 12 months of you closing your account and by the final date of November 2030.Â
If you saved £12,000, this will bump your savings up to £15,000. A great boost to your savings and hard work.
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How does a Help to Buy ISA work?
The help to buy ISA is a great way to save for a house deposit. If you opened one before the 2019 cut-off, you could continue to pay into it until November 2029.Â
The help to buy ISA is no longer available to open. You’d be looking at a Lifetime ISA if you didn’t open a help to buy when they were available.Â
The help to buy ISA allowance allows you to deposit £200 each calendar month. You could add £50 one week, £100 the next, as long as you don’t exceed £200 each month. The limit is £400 per month if a couple of first-time buyers purchase together.
The government bonus is the advantage of the help to buy ISA over simply paying into a savings account.Â
You’ll get a bonus of 25% on what you put into the account, up to a bonus of £3000. You can have more than £12k in the account but the bonus will be capped at £3000.Â
It’s worth noting that the bonus funds can only be claimed when you are buying a home and the money has to go towards the property. You cannot use it for estate agent fees or any other costs that come from buying a house.
You can claim the 25% bonus until November 2030 and the bonus is calculated on the money in your account when you close it.
What are the eligibility requirements for the government bonus?
In order to get your hands on the Government bonus, you need to meet certain eligibility requirements.
Firstly, you need to be a first-time buyer. The help to buy ISA is only for your first home. Your help to buy ISA also needs to have been open for at least 3 months and there should be a minimum of £1600 in the account.
Finally, the property must be worth up to £250,000 outside of London, or if buying within certain areas of London, up to £450,000.
If you meet these criteria, you’ll be able to claim the bonus on top of your help to buy savings.
What happens if my house sale falls through?
Of course, things do not always run smoothly in the world of property buying and selling. Sometimes you can even wonder if buying a house is worth it.
There are many times when people lose out on their dream home because of the chain of buyers and sellers, or people simply changing their minds or having a change in circumstance.Â
If you have applied for your help to buy ISA to be closed and your property purchase falls through, you can re-open a help to buy ISA.Â
You’ll need to get a purchase failure notification, which is basically a document that your solicitor can provide you with.Â
This details that your house purchase did not take place. You can then take this to the bank or builder society and they’ll open an account for you.Â
However much was in your account when you closed it to try and buy the property, you will be able to redeposit as a lump sum.Â
You might be downhearted and glum due to losing out on that house you want, but at least you’ll be able to start over with that money in the account.
What if I never buy a house?
Situations change and some people don’t get around to buying their first time house. Don’t worry, you won’t lose the money in your account.Â
That is your cash. If you don’t buy a property, you’ll simply miss out on the 25% bonus. You’ll be able to get your money and any interest you are due, tax free.
If you aren’t going to buy a house before the cut-off date of claiming the bonus, you might consider transferring your help to buy ISA to a LISA.Â
If you have more than £4k in your help to buy, you’ll need to do a partial transfer as LISAs only let you deposit £4000 a year.
FAQs
How long does it take for help to buy ISA to release funds?
Once you initiate the transfer for your Help to Buy ISA scheme, it usually takes 5 business days. You nominate the account you want to transfer towards, and usually, your solicitor will take care of the recipient.
Can I transfer money from my Help to Buy ISA to my current account?
Conclusion
Now you know how to close a help to buy ISA you can plan for when you need to inform your provider during your house-buying process.Â
It’s also a great idea to top up your help to buy ISA if you haven’t done so already this month.
An easy 25% bonus to help make things a little easier in the exciting but expensive first-time buyer adventure!Â
Read up, do your research and enjoy your first home.
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Disclaimer: Content on this page is for informational purposes and does not constitute financial advice. Always do your own research before making a financially related decision.
