Saving for a deposit is no easy feat, especially in the parts of the country where house prices are climbing faster than your savings balance. One obvious way to fight back is to make sure you're not paying tax on the interest you earn.
Get more tax relief available on the interest you earn on cash saved for a deposit
Saving for a deposit is no easy feat, especially in the parts of the country where house prices are climbing faster than your savings balance. One obvious way to fight back is to make sure you’re not paying tax on the interest you earn.
Thankfully, the new personal savings allowance which lands on 6 April, makes this task easier than ever before. From here on in, basic-rate taxpayers can earn £1,000 in savings interest before being charged any tax at all and higher-rate tax payers will be able to earn £500.The start of the new tax year also brings with it a fresh new tax-free ISA limit. Although for 2016/2017 it does remain frozen at £15,240.
Remember also that you can now choose between paying into a standard ISA and paying into the Government’s property-specific Help to Buy ISA which launched in December 2015.
Finally, if you’re still aged under 40 by April 2017, the new Lifetime ISA scheduled to launch then is something of a no-brainer. It’s a tax-free savings account in which those specifically saving for a deposit (or retirement) can stash up to £4,000 a year and receive a further £1,000 boost from the Government.
At Belvoir, we are speaking to more and more first time buyers. We think this is a step in the right direction to help people get on the property ladder. If you are considering selling your property, we have first time buyers enquiring on a regular basis. Call 0151 231 1613 or email us firstname.lastname@example.org for a no obligation valuation.