couple choosing a home

Lifetime ISA Conveyancing

What is the Help to Buy ISA?

Help to Buy ISAs are a type of tax-free savings account aimed at people saving to buy their first home. You can no longer open a Help to Buy ISA as the scheme ended on 30 November 2019. However, if you already have an account, you can pay into the ISA until November 2029 and claim the 25% bonus until November 2030. For the latest information, visit the GOV.UK website.

What is a Lifetime ISA?

A Lifetime ISA otherwise known as a LISA, is a versatile, cost-effective method to invest and save for your first home or to use later in life.

As with other ISAs, you can invest in the stock market or save cash, and the growth of your funds is tax-free in the UK. However, the true perk is a 25% annual government bonus of up to £1,000.

Terms & Conditions

Below, you can find out about Lifetime ISA terms and conditions, including eligibility and exemptions.

Lifetime ISA: Do I qualify?

  • To be eligible for a Lifetime ISA, you must:
  • Be 18 or over but under 40 to open one
  • Be saving until you’re 50
  • Be saving towards either your first home (worth up to £450,000) or for retirement
  • Be a UK resident, unless you’re a crown servant, their spouse or a civil partner.

How Does it Work?

Withdrawing Money

You can withdraw money from your Lifetime ISA if you are buying your first home. However, there are a couple of other conditions for withdrawing this money.

These include if you are aged 60 or over or are terminally ill with less than 12 months to live. If you do happen to withdraw money for any other reason, you will be charged 25% of your withdrawal amount. By doing this, you can get your government bonus back on your initial savings.

Assuming you get a £250 bonus on top of your £1,000 in savings, your total will be £1,250. That would be £312.50 if you later withdrew it and closed the account. Then you would receive £937.50 in return.

All in all, withdrawing money from your Lifetime ISA for reasons other than buying your first house or retirement money means you will lose 6.25% of what you put in.

First-Time Buyer

A first-time buyer is someone who has never owned a home in the UK or the rest of the world. To get the government bonus, you need to open a Lifetime ISA for at least 12 months. The home you buy must cost no more than £450,000 and be purchased with a mortgage. It must also be the only home you will own and be intended for living purposes.

Can you Transfer Providers?

You do not need to continue with the provider you first selected after the LISA is available.

Interest rates on cash LISAs fluctuate, just like those on regular ISAs, so you’ll need to monitor your account and be prepared to move between LISA providers to take advantage of better offers if you find one.

Buying a property? Call us on 01733 203873 for a free, no-obligation quotation on conveyancing. You can also get an instant quote with us today!

Frequently Asked Questions

No, the sole requirement is that you purchase—rather than buying to let—using a residential mortgage. Make sure it’s worth it by doing the calculations if you might be a cash buyer and are only taking a mortgage to use the LISA.

All you do is move the money from one account to the other. You can only transfer up to £4,000 each tax year. However, this all depends on whether your provider allows the transfer, and usually takes up to two to four weeks.

Yes, you can. If the remaining requirements are met, you can use your LISA savings, including the bonus, to buy the land for a self-build property. Additionally, the home you plan to build must be your first, and you must plan to live there.