Lifetime ISA technical question

r.kermali99

Hi all.

I am a homeowner. My wife is not and has never owned any property anywhere in the past, but we live together in the house I own.

Can I open a LISA in her name, accumulate £4k per year and bank the bonus, and at some point in the future, sell her a share of the home, using the proceeds from the LISA as part of the transaction?

We already have a HTB in her name which I am looking to transfer into a LISA, but before I go ahead and do that, I want to know whether she is still considered a first time buyer for the purposes of LISAs.

As far as I can tell, this should be fine but I am not sure if I am missing something. Any help on this would be much appreciated.

Thanks

bowlhead99

She is a FTB and you are not.

As a FTB she is allowed to buy an interest in a property that she will live in, supported by a mortgage, and use her LISA funds (penalty free) to do that (assuming overall value of property is within qualifying size). The regulations don't imply you are barred from buying your interest in the property from someone who already lives in it. In fact IIRC, either HTBISA or LISA rules specifically give an example of the seller being someone who disposed of a part share and continued to live in it.

I read that HTBs/ LISAs can't be used for "remortgages" but that is presumably because in a straight remortgage you are already a homeowner. It would need to be clear that this is a new purchase where she is buying a partial ownership from you and you are both borrowing money to support the transaction and your new respective ownership shares - rather than you just refinancing with a bit of help from her cash.

Obviously selling her a bit of the property instead of just gifting it to her is something that will involve stamp duty, solicitor cost considerations etc as well as the solicitor concerned being happy to sign off on the paperwork.

If this is off in the future and you don't want to pay for advice now (especially given the product might have "anti avoidance" measures thrown into it as it gets more mature and actually has people using it - not a single person has yet qualified to withdraw money and buy property with it), then the best you can do is read the regulations for yourself and get as comfortable as you can be that it's going to work. The HTB product providers don't give you tax or financial advice.