If I have a LISA and wish to buy a house with this and a portion of money upfront, is this possible?
01 December 2022
Question by Ben
If I have a LISA and wish to buy a house with this as well as a portion of money upfront, is this possible?
Answered by Samantha Secomb
As you probably know, the Lifetime ISA (LISA) is a longer-term savings account from those aged 18 and over but under 40 from the outset. The maximum contribution is £4,000pa and this can be paid until the age of 50. The 25% Government bonus is paid on the invested amount up to a maximum of £1,000pa. Qualifying investments in a LISA are the same as the cash or stocks and shares ISAs and don’t forget LISA forms part of your annual ISA limit of £20,000 (2022/23).
To answer your question, when drawing on your LISA to buy a residential UK property to live in, the costs must be £450,000 or less. You can use some cash but it must have a residential mortgage or loan that ‘takes charge over the property’. The mortgage can’t be a buy-to-let mortgage.
The LISA is intended to help you buy your first ‘home’, so you’re not supposed to rent it out immediately after buying it (though you can if your circumstances change down the line).
Your LISA has to be open for at least 12 months to be able to use it (and the bonus).
I hope this answers your question Ben and gives you a bit more clarity.