Help To Buy ISA - Is this permissable?

Question

Assalamualaikum,

I would like to know the Islamic ruling on the Help To Buy ISA scheme (https://www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/). This is efectively saving money to one side in an account which can be used for a house deposit, and the governemnt gives a bonus once a certain amount is reached. The money added in cannot be withdrawn as cash, rather it can only be used when purchasing a house through solicitors.

Will this be allowed in Islam or is there a form on interest involved.

Appreciate if you could answer this as soon as you can, as this scheme is only around a for a little while longer, and if it is permissible, many people can benefit from it.

Jazakallah

Wasalam

Hasan Ahmed Razzak · Accepted Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

We apologize for the belated response.

We have reviewed the “Help To Buy ISA Scheme” following the link you have provided.

The “Help To Buy Scheme” helps those who are looking to purchase a home for the first time. The ISA and the government incentivizes a bonus up to £3,000 when a customer’s savings reaches a certain amount.

However, the FAQ section states that in order to be eligible for the government bonus, the property must be purchased with a mortgage or else the government bonus will not be applicable.[i]

As you are aware, all interest transactions are forbidden in Islam. This includes taking a house on mortgage as well. Therefore, it will be impermissible to enter such “Help To Buy ISA Scheme” as it would lead to an interest based transaction.

And Allah Ta’āla Knows Best.

Hasan Ahmed Razzak

Student - Darul Iftaa

Paterson, New Jersey, USA

Checked and Approved by,

Mufti Ebrahim Desai.

15-05-1441| 10-1-2020

Question

Answer