LISA Question!

luxxa

Hello there,

A quick question, hoping it's not too stupid so sorry if it is!

I'm looking at opening a LISA for my first home. I have a family member that would potentially stump up the rest of the money in cash, so would I still be able to keep the bonus or would I have to pay the penalty? I.E. I pay the deposit, and the family member effectively gives me a mortgage (which I would pay interest on). I don't want to open a LISA and get into that situation and then have to pay the penalty to remove my savings and lose the bonus!

Thanks

eskbanker

luxxa wrote: »

the family member effectively gives me a mortgage (which I would pay interest on).

'Effectively' wouldn't be good enough IMHO - if you're planning to use a LISA for a first-time property purchase then there are no penalties if "the property is purchased with a loan taken as a charge over the property, i.e. mortgage but excluding a ‘Buy to Let Mortgage’", according to clause 9B.42 of the rules published at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/603261/ISA_Lifetime_ISA.pdf

The rules clearly anticipate a commercial mortgage, but it may be that a formal secured loan agreement with the family member could suffice - if you wanted to explore that avenue then it would obviously be best to involve a solicitor....

luxxa

Thanks so much for your response!