Help to Buy ISAs reminder - How to apply bonus funds
Following press coverage of issues relating to Help to Buy ISA bonuses we remind you of the Help to Buy ISA scheme requirements in relation to bonuses.
If you are instructed by a first time buyer who says they are entitled to obtain a Help to Buy ISA bonus you will need to remind them that these bonus monies can only be applied towards the monies payable on completion. The bonus funds can't be used to pay the whole or any part of the deposit payable on exchange. See Conveyancer Guidelines paragraph 8.3(C) - 'Bonus funds remain the property of HM Treasury until applied to the purchase of an eligible property'. Nor can these funds be used to pay your fees, or the agents fees or any other indirect costs associated with the purchase.
You will need to remind the buyer that they will not be able to use the bonus funds on exchange and that they may need to make alternate provision to pay the deposit. It may be possible for the buyer to negotiate that a reduced deposit be paid to the seller on exchange of contracts.
Once the buyer has closed their Help to Buy ISA account and instructed you to apply for the bonus on their behalf these monies should be held in your client account until required to be paid as part of the completion monies on completion.
The application for the bonus funds includes confirmation by the conveyancing solicitor that the bonus will be applied towards the completion monies. Bonuses cannot be claimed after the completion date.