LISA calculation of property value for shared ownership property

slicedonions

I'm currently in the process of purchasing a shared ownership property. I have a question in terms of how you calculate the 'full sale price' to see if it is under £450,000 and therefore eligible for the LISA bonus.

In the GOV.UK Conveyancers: Lifetime ISA technical guidance it states that:

“A Lifetime ISA investor can purchase a shared ownership property subject to the conditions of the Lifetime ISA and the shared ownership scheme being satisfied.

The price limit of £450,000 applies to the full sale price of the property rather than the initial share purchased.

The full sale price is worked out as a multiple of the equity share being purchased, for example a 25% equity share of a property being purchased is £50,000, so the full sale value is £200,000.

Alternatively, the calculation can be based on the price paid for the equity share being purchased plus the net present value of rental payments due over the term of the lease.”

I read this as suggesting that there are two different but equally valid routes available to you/your conveyancer for making the calculation. A ‘Multiple of Equity Share Purchased’ method (as in the third quoted para, and the ‘Equity Share Purchased + NPV of rent’ method (as quoted in the fourth para) method.

Using the Equity Share Purchased + NPV of rent method, the property would be eligible, however using the Multiple of Equity Share Purchased method it wouldn't be.

However, I'm struggling to get people to recognise the Multiple of Equity Share Purchased method as a valid one as I guess it's a much rarer route.

Does anyone have experience with this? A large amount of money is at stake for me on getting the method recognised by my LISA provider/conveyancer as a route - so thanks in advanced!

London_Lion

I purchased a SO last year and in my experience the Multiple of ESP was the way to go. The Housing Agency (and your lender / financial advisor) will run affordability assessments that will state what's acceptable and not. Your solicitor may have a say on the eligibility of the LISA as well. Good luck!