Govt announces Help to Buy ISA
Chancellor George Osborne said in his Budget speech that a special ISA for first-time buyers would be introduced later this year.
Under these plans for every £200 saved in a Help to Buy ISA, the government will offer a £50 contribution. That means each would-be homeowner saving £12,000 would receive £3,000 from government.
New accounts will be available for four years, but once an account is opened there is no limit on how it can remain open.
The bonus will be available on home purchases worth up to £450,000 in London and up to £250,000 outside London. The bonus will be paid when the house purchase is completed.
Osborne said this was essentially a tax cut for young buyers.
“It is as simple as this: we will work hand in hand to help you buy your first home. This is a Budget that works for you,” he said.
“A 25% top-up is equivalent to saving for a deposit from your pre-tax income – it’s effectively a tax cut for first time buyers.”
Osborne also announced plans for 20 new housing zones, with the locations and further details to be announced in due course.