Help to Buy ISA is the biggest property perk in March's Budget

Chancellor George Osborne delivered his last Budget before May's General Election on 18th March 2015. Having already announced an overhaul of the stamp duty system in December 2014, forecasters were not predicting any major announcements that would affect the property industry. There was, however, a surprise addition for first-time buyers in the shape of a Help to Buy ISA. The Chancellor appealed to those saving for a deposit, saying the Government would add £50 for every £200 deposited into a Help to Buy ISA.

The new Help to Buy ISA accounts will be available over the next four years, although people can save into them for as long as they like. The Help to Buy ISAs will be offered through high street banks and building societies, with savers invited to make a minimum opening deposit of £1,000 and a monthly deposit of up to £200. Each account is run on a 'per person' basis, so if a couple is saving for a deposit, both can have individual ISAs and benefit from the bonuses.

There are, however, restrictions on the value of the property being bought in tandem with a Help to Buy ISA. The bonus will be paid on purchases worth £450,000 or less within London, and on purchases worth £250,000 or less outside of the capital city.

Omitted from the Budget was any reference to extending the inheritance tax threshold - news of which had been rife in the Commons in the hours leading up to George Osborne's big announcement. The Chancellor's muted proposal to reform how property can be inherited will, instead, form a key part of the Tory party's political manifesto. Should David Cameron succeed in May's General Election, homeowners will be able to leave properties worth up to £1 million to their children tax free, while the inheritance tax bill on homes worth up to £2 million will be reduced by £140,000.

As expected, the Budget was full of 'feel good' news, designed to win over voters ahead of the election. News of the Help to Buy ISA should come as a further boost to the property market, where buyers are already enjoying access to Help to Buy mortgages; better rates across the wider mortgage market; a reformed stamp duty system that provides a tax saving for 98% of buyers and a buoyant sales market.

If you would like to take advantage of the current property climate, please contact your local branch today.

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