A Lifetime ISA can be a helpful tool for first-time buyers to help save for a deposit for your first home. A Lifetime ISA, otherwise known as a LISA, can be opened by anyone aged between 18 and 39. The LISA can be used to save up to £4,000 a year, towards either a first home costing up to £450,000 in the UK or for retirement, and currently the government adds a bonus to what you save and will give you up to 25% of what you save so a maximum of £1,000 a year.
It is important to note the earliest you can use the LISA is one year after making your first deposit. You are able to make deposits up to the age of 50. The LISA can only be used to buy your first home and cannot be used for a buy-to-let property. You must intend to live in the property you are purchasing with the LISA bonus.
You are also able, if you are buying a property with a partner, to use their LISA funds too. You are allowed to have a Help to Buy ISA open at the same time as your LISA, which is an old scheme but you cannot use both schemes to purchase. However, you can transfer Help to Buy Funds into your LISA account.
Please note: If you withdraw the money early (i.e. before age 60 without putting it towards your first house) you’ll be charged a 25% fee (equivalent to losing your 25% bonus and a fine of 6.25% on what’s left).
As part of your conveyancing transaction, we can act on your behalf to withdraw the funds to use towards your purchase subject to the conditions above.
The contents of this post do not constitute legal advice and are provided for general information purposes only.
Associated photo designed by Freepik.
The contents of this post do not constitute legal advice and are provided for general information purposes only ■
