Help to Buy or LISA

RedIan

Hi.
My daughter has saved £10000 in a Help to Buy ISA, so another £2000 (over 10 months) will maximise the bonus she receives. If she is not planning on buying a house for a couple of years, is she better off opening a LISA and switching the money over? Am I right in thinking she can move £4000 a tax year, so buy 6th April 2023 all of it will be switched to the LISA, she will have picked up the £3000 bonus she would have had in the Help to Buy, and can still continue saving and gaining bonuses until she decides to use it to buy her first house?

WillPS

So long as she won't buy prior to May 2024, and she definitely wants to use the money for a house costing under £450k as a first time buyer and is fine with the money costing more to access should she need it before then... then yes. Move 4k in this tax year and the subsequent 2 tax years and she'll be effectively in the same place, but will be able to buy a house costing up to £450k rather than the £250k (£450k in London) stipulated by H2B ISA.

She will then be able to save an additional £4k (topped up to £5k) every tax year until she decides to buy.

My fiancée and I have been doing something similar for the last 18 months. It felt a little risky at the time but I'm glad we did it.

eskbanker

The principle of that thinking is sound, but she'd need to consider likely purchase timescales carefully, in that it would take until 6 April 2024 to get all £12K into the LISA, and having done that, she wouldn't then be able to pay any more money into it until on or after 6 April 2025, i.e. it would take until then before she could 'overtake' the £12K she'd get to next summer with the HTB....