Custom Build and Lifetime ISA/LISA

SlipperyRocks

Hi everyone, 

I’m really at a loss - I’m attempting to do a custom build project, not quite like the self build, the land I’ve reserved is a plot, and it already has planning permission etc. I’m on the verge of paying to have my decision in principle done, when it occurred to me about the lifetime ISA. My mortgage advisor couldn’t tell me how a Lifetime ISA would work with the custom build mortgage, as the mortgage is released in three stages. When speaking to the building society, they’ve told me that you can use it, but the property purchase has to be completed within 90 days after the finds are released. How does this work with funds being released in three stages? 

If the land is bought in the first stage, I’ll be required to pay around 5%. But there’s no way from land to completed project it will be three months. 

The building society also said a solicitor could apply for an extension of up to 60 days, but that’s still only five months on from the initial land purchase. 

Does anyone have any idea of how this works? This is all new to me and I’m relying on the LISA to form the deposit for this project. I’ve looked at the government pages and can only find the standard you can use the money for the land purchase if it complies to all the rules etc. 

Thank you in advance. 

Alexland

The LISA can be used towards the land purchase which would need to be supported by a mortgage. Provided you are using the LISA and mortgage together to buy the land (assume this would be in the first release of the mortgage money) then I don't see the significance of the later mortgage payments towards the build or when that might happen.

You can use the Lifetime ISA to buy land for a self-build property as long as the purchase meets all the other criteria for property purchase through the scheme.

https://lifetimeisa.campaign.gov.uk/#withdrawing_for_your_first_home

If you want to be sure about this then engage a local solicitor to quote on helping you with the conveyancing.