Renting LISA bought first home

RossDawson12

I have seen multiple posts/articles on this issue and I’m still left uncertain.

If I was to purchase a home with a LISA and then decide to upsize to a bigger house in the future, would I be able to rent out my first home?

If so, how long before you can make this move without paying a penalty from the LISA?

Any help appreciated.

eskbanker

There's no hard and fast time limit, but the Treasury assured MSE that they'd take a common sense approach:

https://blog.moneysavingexpert.com/2016/04/can-you-rent-out-a-home-bought-with-a-help-to-buy-isalifetime-isa/

RossDawson12

That was one of the articles I was referring to; I am just cautious as to whether upsizing would be a good enough reason to rent out my first home.

Hopefully around 5 years would be an acceptable timespan.

eskbanker

RossDawson12 said:

That was one of the articles I was referring to; I am just cautious as to whether upsizing would be a good enough reason to rent out my first home.

Hopefully around 5 years would be an acceptable timespan.

The situation you describe is exactly the same as scenario 3 in that article, confirmed as acceptable to the Treasury, whether after two, five or ten years:

3. You live there then want to buy elsewhere and rent it out.
After two years of living in the property, you decide you want to upsize to another house, and want to keep this to rent it out.
i) As above but after five years.
ii) As above but after 10 years.

allwellatthedairy

Hello, 4 years later, I am revisiting this post.

Could someone please direct me to up-to-date information on this same topic, but for LISA.
At the time of writing the blog in 2016, Martin Lewis says "So most likely the same rules as for the Help to Buy ISA apply". Is this the case? I cannot find any proper information on this.

And would the "renting two or + years after buying through LISA" scenario be the same as "selling two or + years after buying through LISA" scenario? 

Many thanks in advance

masonic

allwellatthedairy said:

Hello, 4 years later, I am revisiting this post.

Could someone please direct me to up-to-date information on this same topic, but for LISA.
At the time of writing the blog in 2016, Martin Lewis says "So most likely the same rules as for the Help to Buy ISA apply". Is this the case? I cannot find any proper information on this.

And would the "renting two or + years after buying through LISA" scenario be the same as "selling two or + years after buying through LISA" scenario? 

Many thanks in advance

There is no proper information because it is a judgement call. But living in your first home for 2+ years is pretty strong evidence you bought it for the purpose of living in it, even more so if you can point to a change in circumstances or needs as a reason for moving out. The first rung on the housing ladder is rarely the ideal property for the buyer long-term.