Lifetime ISA / Incentive question

Whty271

Hi,
We are completing on a property next month, our initial intention was to use our Lifetime ISA to pay for the majority of the deposit.
Our developer had originally given us a stamp duty incentive of £4K, since the stamp duty is now £0 they have changed it to a deposit contribution.

Deposit required: £16,200
Lifetime ISA balance including bonus: £15,000
Developer incentive: £4000

So now I assume we need to use the £4K deposit contribution and only £12,200 from our lifetime isa, which means we we will have to pay the 20 % penalty on the remaining £2800 in our lifetime isa?

I assume there’s no way of using the full balance of the lifetime isa for the deposit and then the remaining money from the solicitor being paid to us?

Thanks in advance for any clarity on this

thaddy

I asked a similar question on a different thread and the response was that you and your conveyancer have to declare that any LISA money withdrawn without penalty will be put towards the purchase of the property, so if you're only needing a certain amount towards the deposit then you either leave the surplus in the account or pay the withdrawal penalty if you choose to take it out.  They advised that it's better to increase your deposit to include the full LISA balance if possible. I think the conveyancer has to make a declaration to the LISA provider on how much was used towards the property purchase.

letsbetfair

Can you not change the mortgage so you're paying a larger deposit?

MrsR1234

The withdrawal has been effectively wiped out this year due changes due to cornovirus.. So use what you need for your sale and the rest you will be able to withdraw and will only lose the bonus, that wasn't yours to start with.

Otherwise increase your deposit amount. 

diggingdude

I would just increase the deposit. Don't give away free money