Helping First Time buyers

Whilst buying your first property can be a stressful and daunting time, Donnelly & Elliott is committed to making this process as simple as possible. This article has been written to help first time buyers prepare for this.

The government launched two tax free cash savings plans to help first time buyers and which give a cash bonus for those that meet the criteria:

  1. The Help to Buy ISA scheme is a savings plan with attractive rates of interest offered by banks. On top of the interest received, the Help to Buy ISA will pay a 25% bonus upon the closing of the account when the money is used towards the purchase of a first property. The property must be in the United Kingdom and must cost no more than £250,000.00 or £450,000.00 if it is in London.

You must have also paid a minimum of £1600 into the ISA to be able to withdraw the bonus.

  1. The Lifetime ISA works in a similar way to the Help To Buy ISA. You must be between 18-40 to open a Lifetime ISA. You are able to pay up to £4,000 per year into it but you must have had the ISA for a year before you are able to withdraw funds to purchase a property. It gives you a 25% cash bonus each year on sums added to the ISA if they are withdrawn to help purchase a home. You are able to keep the ISA open and continue to save for retirement if you wish.

In either of the above cases we recommend that you don’t withdraw the money until you have spoken to us for advice on your position. We are pleased to offer an initial discussion about this free of charge.

The Government also announced in November 2017 that First Time Buyers will be eligible for Stamp Duty Land Tax relief. No tax is payable if a first time buyer buys a property in the United Kingdom and which costs no more than £300,000.00. Relief will also apply on properties between £300k-£500k where first time buyers will pay a flat rate of 5% on the purchase price above £300k.

The eligibility rules for this relief are complicated and whilst we are only able to give Stamp Duty Land Tax advice when we act for you we are more than happy to discuss your plans and give an idea of the potential tax implications when we provide an estimate of our fees to help with your budgeting.

An increasing number of First Time Buyers are buying with the aid of Parental Deposits or “The Bank of Mum & Dad” as labelled by the press. There are various mortgage products that cater for such arrangements but there may be further considerations as to property ownership, particularly for couples buying jointly, who are not married. This is a very complicated and delicate area of law and Donnelly & Elliott pride themselves on being able to give clear advice on your individual circumstances. We support first time buyers fully in getting onto the housing ladder and throughout the house buying process.

Article published June 2018

Thinking of buying your first home?  Speak to a member of our team on:

02392 505 500


About the Author:

Stuart Forster is an Associate Legal Executive in the Residential Conveyancing Department at Donnelly & Elliott Limited, Solicitors in Gosport.  Stuart specialises property sales and purchases, transfers of equity, remortgages and assents.  He prides himself on being thorough and taking a pragmatic yet efficient approach.

As part of their commitment to excellence in this field, Donnelly and Elliott Solicitors are proud to be accredited members of the Law Society’s Conveyancing Quality Scheme.