When is the Help to Buy ISA bonus paid?
The Help to Buy ISA bonus lands at completion, not at exchange. That distinction really counts, because your solicitor cannot put the bonus towards the exchange deposit. You need enough cash of your own to cover the exchange deposit without leaning on the government top-up.
Once you exchange contracts, your solicitor claims the bonus from the government. It takes a few working days to come through, and it then joins the rest of the money used to complete. It helps to check your solicitor has done this before and has built the timing into their plan.
When is the Lifetime ISA bonus paid?
The Lifetime ISA bonus is paid into your account each month, so by the time you buy it is already sitting there as part of your savings. To release the money, you send your LISA provider a property purchase withdrawal request that names the property and your solicitor.
The withdrawal can take up to 30 days, so begin it well ahead of your completion date. Your solicitor handles the timing, but the sooner you set the request going, the less chance of a hold-up on completion day.
Common pitfalls to avoid
The mistake people make most often with the Help to Buy ISA is expecting the bonus to cover the exchange deposit. It will not. If your exchange deposit is 10% and your own cash falls short without the bonus, you will have to agree a smaller exchange deposit with the seller or find the difference elsewhere.
With the Lifetime ISA, the biggest risk is leaving the withdrawal too late. A slow provider can push back your completion. When you are ready to move, you can get a quote to see where you stand. Keep an eye on the property price too: go over £450,000 and you lose the bonus and face the withdrawal penalty.