Lifetime ISA use on a New Build

Tom_Hendo

Hi All

Just looking for a bit of info in lifetime ISA use when it comes to a new build house.

I am viewing a newly converted property in 4 weeks, and it is due for completion by the end of Feb. There is a reservation fee, then 10% of total ammount due within 28 days. The remaining 90% is due at the point the house is completed and exchange will happen.


I have enough money to pay 10% upfront without using the lifetime ISA, but will want to use the lifetime ISA combined with other savings and a mortgage (60-70% LTV).

Someone said that I need to check if I can use the Lifetime ISA on a new build, and everything I read online is conflicting. One article said as long as the property is complete I can use it, but not as a deposit for a none completed property. I wondering where my above circumstances fit into this?


Cheers

eskbanker

I suspect that the interpretation issue hinges on the requirement to use LISA funds within 90 days of withdrawal, although this can effectively be doubled with extensions of 60 and then 30 days if necessary. This can be problematic if the time from deposit to completion of construction and purchase is more than six months, but it sounds like yours is nearly ready (assuming the 'Feb' is 2019!) and you don't need the LISA money up front anyway, so this point is moot.

You can read up on further details at https://www.gov.uk/guidance/lifetime-isas-for-isa-managers#withdrawals-for-first-time-residential-purchase and/or discuss with your conveyancer....

Alexland

When using a LISA to pay towards a new build consider the risk that if the completion date is brought forward you could have a problem if the LISA has not been open 12 months from the initial deposit to enable your solicitor to make a penalty free withdrawal.

Tom_Hendo

Thanks both for your response. I would need to consider the exact potential completion date within 180 (or less) days as above. Read into the article you posted and it was really helpful. Looks like there are no specific bountries for using it on a new build, jsut the 90 days (and extensions where appropriate)

I have had the LISA open since it was first available, so have well over 12 months already luckily so that isn't somethign I would need to consider.

bendavidson39

Hi - We have the same issue looking at a new build property that is due for completion in Dec so a bit tighter with the 6 months referenced above. Did it work okay for you?

badger09

bendavidson39 said:

Hi - We have the same issue looking at a new build property that is due for completion in Dec so a bit tighter with the 6 months referenced above. Did it work okay for you?

OP last posted in January 2019 so is unlikely to see this.