The Help to Buy ISA is a closed government savings scheme that gave first-time buyers a 25% bonus on savings towards a first home. It shut to new accounts on 30 November 2019, though existing holders can keep saving until November 2029.
In one line: The Help to Buy ISA was a first-time buyer savings account paying a 25% government bonus, now closed to new savers.
How the Help to Buy ISA works
Existing account holders can pay in up to 200 GBP a month and claim a 25% bonus when buying, up to a maximum bonus of 3,000 GBP. The bonus is paid on completion via the conveyancer, not into the account.
Saving the full 12,000 GBP needed for the maximum bonus earns an extra 3,000 GBP towards a first home priced up to 250,000 GBP, or 450,000 GBP in London.
New first-time buyer savers now use the Lifetime ISA instead, which offers a similar 25% bonus on larger annual contributions.
The Help to Buy ISA vs the Lifetime ISA
The Help to Buy ISA is closed to new applicants and caps monthly deposits and the bonus. The Lifetime ISA replaced it for new savers and allows larger annual contributions with a wider property price limit.
Holders cannot pay into both a Help to Buy ISA and a cash ISA in the same tax year under the old rules.
Primary source: GOV.UK: Help to Buy ISA