Key Facts about a Lifetime ISA (LISA)

Lifetime ISAs were introduced by the government on the 6th of April 2018 as an alternative to the Help to Buy ISA scheme which is no longer available.

This is a great way to save for your first property and the lesser-known pension pot where the government adds 25%, this is up to your contribution of £4000 a year.

There is a list of criteria that the savers need to bear in mind which are listed below

• You can open a LISA if you’re aged 18 to 39.

• LISAs can be used for purchasing your first home or as a pension.

• You can contribute up to £4,000 a year, regularly or in lump sums.

• The Government adds 25% to your savings, up to £1,000 per year (up to a total bonus of £32,000)

• You can invest in stocks and shares.

• The maximum price for your first home is £450,000.

• You can’t use the funds until the LISA has been open for 12 months.

• If you withdraw for any other purpose than your first home/pension, there’s a 25% penalty.

• The Property must be occupied by you on completion and be your main residency.

If you’re buying with a partner and they are also a first-time buyer, then you both can use your LISA towards the purchase of a property. There also isn’t a limit to the number of people using a LISA to buy a single property.

You can also use your LISA to ‘buy-in’ to a property that is already owned by another person (such as your partner), provided that the conditions of the Lifetime ISA are satisfied.

This blog was written by Lauren Payne. Based in our Leamington Spa office, Lauren is a Licensed Conveyancer within our Conveyancing Department, with a 5/5 star rating on ReviewSolicitors.