Lifetime ISA FTB withdrawal / timing questions

SamJ35

Hi all

Apologies if this is a common question but trying to wrap my head around this. We're FTB and have put an offer in on a house. TBC whether accepted but I'm currently planning the best way to sort our deposit out as well as other costs associated with buying. 

We've maxed out our 2 LISAs for this tax year and the bonus is expected to be paid on or before 5th April. I would like to keep some money outside the wrapper for legal costs, surveys and stamp duty, as I understand these cannot be paid for using the money from the LISA (can anyone confirm this is correct?). The value of our LISAs also do not cover the total 10% deposit. 

I am considering paying into my own LISA on 6 April, which Skipton have informed me the bonus will be paid by 4th June. As we and the seller have no chain, if this moves veerry quickly (I know), and my conveyancer requests the money from Skipton before 4 June and as such receives the money before the date the bonus is paid, I understand the 1k bonus will be paid into the account. Would it then be possible for me to withdraw this 1k and be charged the penalty, and as such receive £750? Or I suppose if completion is delayed (to after bonus payment date), my solicitor would then be able to request the money (as I understand multiple withdrawals before completion are allowed). 

Effectively, paying into the LISA is better than not, as a bonus will be received whether that is £1000 or £750 (as long as the entire balance is withdrawn before the bonus is paid). Does that make sense? 

Thanks

masonic

Yes you must use all money withdrawn from the LISA towards the property transaction itself.

For that last bit of bonus money, if it is paid after completion you could either leave it in the LISA and gain access to it penalty free at age 60, or withdraw it and pay the penalty. There's certainly nothing to lose by paying an extra £4k into the LISA that will go towards the purchase.