A Help to Buy ISA and a First Home That Won't Happen Now

If someone dies with a Help to Buy ISA and the house has not yet completed, the government bonus is never paid. That is the hard part to accept, because the bonus is usually the whole point of the account. It is worth 25% of the savings, and families reasonably assume it is money that has been earned and set aside. It has not. The bonus only ever comes into existence at the moment a qualifying property purchase completes, and a death before completion means there is no completion for it to attach to.

What does survive is the money actually paid in, plus the interest. That belongs to the estate like any other savings account, and it passes under the will or, if there is no will, under the intestacy rules. So the account does not vanish and the family is not left with nothing. But the top-up that made a Help to Buy ISA worth having is gone, and for a couple who were counting on two bonuses to reach a deposit, the purchase they were planning often cannot go ahead as it was.

This page explains exactly what happens to the account and the bonus when the saver dies before buying, what a surviving partner is realistically left holding, and the one part of the tax shelter that a husband, wife or civil partner can still keep.

The short answer: no completion, no bonus

The Help to Buy ISA was designed to reward one specific act: buying your first home. The government does not add the bonus as you save. It adds it once, at the end, when your conveyancer applies for it as part of the purchase. The solicitor claims the bonus, it is paid to them, and it goes towards the completion monies. No purchase, no claim, no bonus.

That structure is easy to miss while everything is going to plan, and brutal when it is not. If the saver dies during the search, during the mortgage application, after an offer is accepted, or even after exchange but before completion, the bonus has not crystallised. There is nothing for the estate to claim, because the entitlement was always conditional on a completion that will not now happen.

It also means the bonus was never the saver's property in the way the balance was. The balance is theirs, sitting in the account, and it forms part of what they leave behind. The bonus was a promise the government made about a future event. When the event cannot occur, the promise lapses.

Why the bonus only exists at completion

It helps to know how the numbers were meant to work, because it shows why nothing can be salvaged from the bonus specifically. The government adds 25% to the amount saved, with a minimum bonus of £400 and a maximum of £3,000. To earn the full £3,000 you had to save £12,000. The property being bought had to cost no more than £250,000, or £450,000 in London.

The scheme closed to new savers on 30 November 2019. Anyone who already held an account can keep paying in until 30 November 2029, and any bonus must be claimed by 1 December 2030. So there are still live accounts, and there will be for years, which is precisely why this question keeps arising.

Source: GOV.UK, Help to Buy: ISA scheme rules, HM Treasury.

The critical mechanical detail is that the bonus is not available for the exchange deposit. It arrives only at completion. So even a saver who was days from moving in had not received a penny of bonus, and their estate cannot claim it after death. This surprises people who assumed the money was already "in the pot". It never was.

What the money in the account actually becomes

Strip away the bonus and what is left is an ordinary cash ISA balance: the contributions plus whatever interest has accrued. That money is an asset of the estate. It does not pass automatically to a partner, a fiancé or a joint buyer just because they were buying together. It goes where the will directs, and if there is no will, where the intestacy rules send it.

That distinction matters most for unmarried couples. If two people were buying a first home together and only one held the Help to Buy ISA, the survivor has no automatic right to that balance. It belongs to the estate of the person who died, and the survivor's claim on it depends entirely on the will or on the intestacy rules, which do not recognise a partner who was not a spouse or civil partner. It is one of the quiet cruelties of buying before marrying.

The provider will freeze the account once told of the death and will release the balance to the personal representative in the usual way, on production of the death certificate and proof of entitlement. If you are unsure how long that and the rest of the estate takes to unlock, we set out the realistic timeline in how many weeks until the family can touch the money. You will also want enough certified copies of the certificate to send round every provider at once, which is covered in how many certified death certificates you should buy.

The extra ISA allowance a spouse can still keep

There is one piece of good news, and it is worth claiming. A Help to Buy ISA is a type of cash ISA, and when an ISA holder dies their surviving husband, wife or civil partner is entitled to an additional permitted subscription. In plain terms, the survivor gets a one-off extra ISA allowance equal to the value of the ISAs held by the person who died, on top of their own annual allowance.

The point of it is that the money can stay sheltered from tax inside an ISA in the survivor's own name, rather than the wrapper simply being lost when the account is closed. You generally have three years from the date of death to use it, or 180 days after the administration of the estate is finished if that is later. You do not have to stay with the same provider, though not every firm accepts these subscriptions.

This only applies to a spouse or civil partner. An unmarried partner cannot claim it, which is another reason the marital position matters so much here. The mechanics, the paperwork and the deadlines are set out in full in our guide to the extra ISA allowance a surviving spouse can claim.

What a surviving partner is left holding

Put the pieces together and you can see the position a survivor is usually in. They have the deceased's savings, if they are entitled to them under the will. They have no bonus. And they have a purchase that was built around two people, two incomes and often two Help to Buy bonuses, that now rests on one.

In practice that means the plan almost always has to be rebuilt. The mortgage the couple were offered was assessed on two salaries; on one, the amount a lender will advance is smaller, sometimes far smaller. The deposit is short by the missing bonus. The affordability that made the numbers work has gone. Many purchases that looked comfortable become impossible on a single income, and the honest answer for a lot of people is that the house they were about to buy is no longer the house they can buy.

None of that is a failing on the survivor's part. It is arithmetic. What matters is not pushing ahead on hope. Speak to the conveyancer and the lender early and get a straight answer on whether a purchase in your sole name is realistic before you spend anything more on surveys or searches.

This is also the moment the value of protection becomes painfully concrete. A couple taking on a first mortgage together are exactly the people for whom life cover written against the loan changes the outcome of a death from "lose the home" to "keep it". If you are the survivor going ahead alone, or you are reading this before you buy and want to price cover against the mortgage you are about to take on, you can get life insurance quotes through an FCA-authorised broker.

If contracts had already been exchanged

The situation changes sharply once contracts are exchanged, because exchange is the point at which a purchase becomes legally binding. Before exchange, either side can walk away. After exchange, the buyer is committed, and that commitment does not simply evaporate on death.

If the person who died had exchanged contracts on a purchase, the estate can be bound to complete, or to forfeit the deposit and face a claim for the seller's losses if it cannot. This is not something to work out alone. The personal representative needs to take advice from the conveyancer immediately, because the deadlines in a contract keep running whether or not the family is ready to deal with them.

It can cut the other way too. If the deceased was selling as well as buying, or the purchase was part of a chain, a death can collapse the chain and expose the estate to claims from others in it. The interaction between a binding contract and a death is genuinely complicated, and it is worth reading alongside the wider question of what an estate can and cannot do with property before a grant is issued.

How it differs from a Lifetime ISA

A common and understandable confusion is between the Help to Buy ISA and the Lifetime ISA, because both pay a 25% government bonus towards a first home. On death, they behave differently, and it is worth being clear which one you are dealing with.

A Lifetime ISA pays its bonus as you go, into the account, so on death the bonus already paid is part of the balance and passes to the estate. There is also no government withdrawal charge on money taken out because the holder has died. A Help to Buy ISA is the opposite: because its bonus is only ever paid at completion, a death before completion means the bonus is never added at all. Same headline rate, entirely different result. If the account in question is a Lifetime ISA rather than a Help to Buy ISA, the family keeps more than this page describes.

Scotland and Northern Ireland

The Help to Buy ISA and the additional permitted subscription are set by HM Revenue and Customs and run identically across the whole of the UK. The 25% bonus, the completion condition and the spouse's extra allowance do not change depending on where you live.

What differs is the machinery of the estate and the property purchase around them. In Scotland, the process that gives an executor authority is confirmation rather than a grant of probate, and a house purchase runs on missives rather than exchange of contracts, with the point of binding commitment reached earlier in the process. In Northern Ireland the conveyancing and succession rules differ again, and the property side of a death carries its own quirks, some of which we cover in our guide to the mortgage after a death in Northern Ireland. Wherever you are, the bonus rule is the same: it is paid on completion or not at all. You can find the rest of this topic through our guide to bereavement admin, assets and contracts.

Frequently asked questions

Is the Help to Buy ISA bonus paid if the saver dies?

No. The 25% government bonus is paid to a conveyancer only at the completion of a qualifying property purchase. If the saver dies before completion there is no purchase for it to attach to, so the bonus is never paid. The money actually saved, together with the interest, remains part of the estate.

What happens to the money in the account itself?

The savings and interest belong to the estate and pass under the will or the intestacy rules. A surviving husband, wife or civil partner can also claim an additional permitted subscription, letting them shelter an equivalent amount inside their own ISA, so the tax wrapper is not simply lost even though the bonus is.

Can the surviving partner still buy the house?

They can, but on their own affordability and without the bonus of the person who died. Where the plan depended on two incomes and two bonuses, the purchase often has to be renegotiated or abandoned. Speak to the conveyancer and lender early, because an exchanged contract can bind the estate to complete or to forfeit the deposit.