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What you need to buy your first home with a Lifetime ISA

When the time finally comes and you have found your ideal first home, you can use your Lifetime ISA element to help towards purchasing the property. To do this you need to make sure you are eligible and the property meets the terms set out by HMRC below. If these are not met, the Government withdrawal charge will apply. 
Six point checklist on the requirements to buy your first home using a Lifetime ISA.

What happens next?

Getting on the property ladder is an exciting milestone and we are glad to have been part of helping you save for this moment. Now you have found your first home, you can take your savings in your Lifetime ISA to help towards purchasing the property. 

If your home meets the terms above from the HMRC, you need to complete the Lifetime ISA House Purchase Investor Declaration form and provide this to your conveyancer. You will also need to provide your conveyancer with the Lifetime ISA Conveyancer Declaration form which your conveyancer will complete. Both forms must then be provided to us.

Customer Services will be able to provide you with both forms and let you know the current value of your Lifetime ISA element. 

Once we have received the forms, and we are happy with the information that has been provided we will make the payment of the requested withdrawal amount directly to your conveyancer. 

More information about what happens when using your Lifetime ISA element to purchase your first home can be found below.  

What happens if completion does not happen within 90 days?

If the home purchase is not completed within 90 days of receiving the money from the Lifetime ISA, and both parties are still in agreement then the conveyancer can apply for a 60 day extension. 

If after the 60 day extension the purchase has not been completed your conveyancer can apply for a 30 day extension. After this, regardless of whether you and the seller are still in agreement, the Lifetime ISA money must be returned to us. If not, the 25% Government withdrawal charge will apply.

Don’t worry, you can still use the Lifetime ISA element towards the purchase but we will just have to start the process again.

 

Do I need to withdraw all the money from my Lifetime ISA element?

No you choose how much of your Lifetime ISA element you would like to withdraw for your home purchase. You can make several withdrawals between the initial deposit and completion of the purchase, however HMRC rules require us to have the completed Investor Declaration and Conveyancer Declaration for every withdrawal.

Young couple

What if I am purchasing a home with someone else?

If they have a Lifetime ISA they will also need to go through this process and your conveyancer will manage this. If not, only your Lifetime ISA will go towards the purchase of the first home.

 

Does the home I buy with my Lifetime ISA element have to be my main residence?

Yes, when a property is purchased prior to it becoming habitable, you must intend to occupy it as your only main residence when construction has finished. 

If you are not a UK resident but a UK Crown employee serving overseas, or your spouse or civil partner is a UK Crown employee, you must have the intention to occupy the property as your only or main residence once able to do so. If you are a UK Crown employee, you are allowed to let your property until such time you return to the UK and can take up occupation. This is the only instance where you can use a Lifetime ISA for a buy to let. 

   

What happens to my Lifetime ISA element after the home purchase is complete?

Once the purchase has been completed if you have money left over in your Lifetime ISA element, or you continue to make monthly contributions into your Lifetime ISA element, then it will remain open. You will receive the Government Bonus on contributions made up to the age of 50 and gain access to the money from your 60th Birthday onwards (otherwise the government withdrawal charge will apply).

If you withdraw the full value of your Lifetime ISA element, and you do not have a Direct Debit contributing to this element, your Lifetime ISA will close. If you plan to save for later on in life, then you may want to leave some money in the Lifetime ISA element.

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