Lifetime Isa ( LISA ) For Commercial To Residential Conversion

digiman999

Hi All,

The new Lifetime ISA looks great for buying my first property. Single flats here are £60k+. Can the LISA be used for the deposit/outright purchase of a commercial property (around £10k), with the plan to convert it into a residential? If not, I'd best maybe hold the cash to buy it outright without a LISA, or save the LISA for retirement.

Regards

eskbanker

The rules are on page 152 (section 9B.42b) of https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/603261/ISA_Lifetime_ISA.pdf:

On completion of the purchase, the Lifetime ISA investor must also immediately occupy the land as their only or main residence; so therefore the land or property may not be purchased as a buy to let.

Where the land comprises a partially completed dwelling but at the time of purchase completion it is not yet habitable, the Lifetime ISA investor must intend to occupy it as their only or main residence immediately on it becoming suitable for such use.

which does seem open to interpretation in the context of starting from a commercial property.

Perhaps clearer guidance will be available closer to the time, given that LISAs can't be used to buy property for another year yet. Also bear in mind that they can only be used in conjunction with a mortgage....

bowlhead99

IIRC for both HTB and L ISAs, the purchase has to be a of qualifying interest in land with the definitions talking about that meaning land with a dwelling on it capable of being registered at land registry (or equivalent in other UK territories).

If you are buying something commercial, rather than something with a dwelling on it, even if you might plan to build one or convert something later, that shouldn't qualify. However, if you are buying a conversion in progress (with full permission and conversion started, just it isn't yet habitable), then that should be ok just like if you were buying a "normal" new build from a developer that was in progress and not yet habitable.

eskbanker

bowlhead99 wrote: »

IIRC for both HTB and L ISAs, the purchase has to be a of qualifying interest in land with the definitions talking about that meaning land with a dwelling on it capable of being registered at land registry (or equivalent in other UK territories).

The HTB wording is "comprises a building that is used or suitable for use as a dwelling, or is in the process of being constructed or adapted for such use" (which I think would work in OP's favour) but I couldn't find any reference to LISAs using the same definition - the updated ISA guidance document simply refers repeatedly to 'first time residential purchase' without any apparent definition of this term.

It does also say "conveyancer declaration and Lifetime ISA declaration templates will be provided in Autumn 2017" though!

isasmurf

Same definition for LISA.

The legislation states
The account investor must—
(a)on completion of the purchase occupy the land as their only or main residence; or
(b)in consequence of the land comprising a residential property in the process of being constructed or adapted for use as a dwelling, on completion of the purchase must intend it to be their only or main residence and must occupy it as such on its becoming suitable for such use; or
(c)in consequence of the account investor being an individual described in regulation 10A(2)(f)(i) or (ii), be unable to so occupy the land but must intend to do so in the future.

"residential property” means a legal interest in land which comprises a building that is used or suitable for use as a dwelling, or is in the process of being constructed or adapted for such use;