MortgagesDec 1 2015

Govt’s H2B Isa offers tax-free interest and 25% contribution

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Govt’s H2B Isa offers tax-free interest and 25% contribution

The next phase of the government’s help-to-buy scheme is expected to go live on 1 December when the government enables would-be buyers to take out a help-to-buy Isa.

The H2B Isa will give people tax-free interest, and they will receive a contribution from the government of 25 per cent of the property value to go towards the deposit for their first home.

A minimum amount of £1,600 needs to be built up within the Isa to qualify for the government contribution, with the maximum boost being £3,000 for savings of £12,000 and above.

Help-to-buy Isas at a glance

Maximum initial deposit


Maximum monthly deposit


Maximum government contribution


Minimum government contribution


Account available to open for

The next four years

Minimum term to secure bonus

None (but minimum value of £1,600 required to qualify for bonus)



Maximum house purchase price

£450,000 London, £250,000 rest of UK


Permitted at any time (but government contribution is only made through a solicitor upon the purchase of new home)

Source: HM Treasury/Tilney Bestinvest

Adviser view

David Smith, director of financial planning for London-based Tilney Bestinvest, said: “The H2B Isa is no doubt a well-intentioned policy, boosting savings for first-time buyers by 25 per cent, but it is not without limitations. There is no investment capability, with cash being the only savings option, and with interest rates as they currently are, growth will be limited.”