Using a LISA for a joint purchase - leftover funds?

raven6323

I currently own a flat which will (hopefully) have about £160k equity in it when I sell up. When I do, my partner and I would like to buy somewhere together. He will have about £20k in a LISA to put down as a deposit. 

We reckon the property we buy will be around £350k in which case the plan is to get a mortgage of around 200k (joint salary of £65k) and of the remaining £150k he'd contribute 20k and I'd contribute £130k of my equity as a deposit. The extra £30k would be returned to me upon completion.

Since LISAs can only be used for house deposits, will the fact that there is money being returned upon completion contravene the withdrawal criteria. Could it be seen as an attempt to get around withdrawal penalties?

I would make it very clear to my solicitor that the leftover funds were to be returned to MY nominated bank account, but to make it even clearer that the leftover funds are not LISA funds, could mine and my partner's funds be kept in separate accounts by our solicitor rather than held in one big pot? 

FrustratedPython

Bad news I think - LISA savings can only be used for a house purchase by first time buyers.  In the case of a joint purchase you both have to be first time buyers I believe.  So think carefully about whether his LISA should be used or would be better being left as a pension supplement, if you can afford it.  Essentially, I think your question is moot.

raven6323

FrustratedPython said:

Bad news I think - LISA savings can only be used for a house purchase by first time buyers.  In the case of a joint purchase you both have to be first time buyers I believe.  So think carefully about whether his LISA should be used or would be better being left as a pension supplement, if you can afford it.  Essentially, I think your question is moot.

I don't think that will be an issue as I'm sure my partner can use his LISA even though I already own property. I however, would be unable to use mine if I had one.

https://www.moneyboxapp.com/faqs/lisa/buying-house-with-someone-else/#:~:text=Yes!,a Help to Buy ISA.

https://www.gov.uk/government/publications/conveyancers-lifetime-isa-technical-guidance/conveyancers-lifetime-isa-technical-guidance

Mark_d

The money being returned to you is your money.  Not sure why this might affect your partner's LISA

raven6323

Mark_d said:

The money being returned to you is your money.  Not sure why this might affect your partner's LISA

Since both our deposits would be paid into same account before completion, the money all gets muddled up. Is there not then a risk that his funds don't go towards the purchase (which is one of the LISA withdrawal criteria)

I appreciate I'm probably overthinking this!!!