Lisa and owning a house abroad

Mo009

Hello everyone. I have had my Lisa account for a couple of years now. I've recently just found out that my family is planning to sell a house that we have inherited after our father died when I was a young teenager. The house has been empty for over a decade due to the family conflict, and we were unable to do anything with it. It didn't even cross my mind that something I am only a partial owner (1/8) of and I am unable to make any decisions about could be an issue with me being a first-time buyer in the UK. Now I've been told that because of this house I am unable to use Lisa, which is confusing to me as this house does not fully belong to me, nor am I capable of living in it as there are multiple people who own the house as well. I am quite confused on what to do next, as the house apparently is being sold now after almost 20 odd years, so I wouldn't be a partial owner of this property anymore. In this case, can I still go ahead and use Lisa (I have been making contributions towards it already) to buy my first property or not? Many thanks.

masonic

The rule is that you must never have had a legal interest in residential property anywhere in the world. So you would not be able to use your LISA towards a first time property purchase, having previously owned an interest in this foreign property. You would still be able to access the funds penalty free from the age of 60, or make a withdrawal subject to the 25% penalty (a net 6.25% loss of original contributions). The proceeds from the sale of the property may avoid you needing to do that, especially if you have any other savings.

Mo009

I understand, so even in my case they I am not allowed to use Lisa? I have not purchased this house. This was inherited when I was very young, and I haven't had any say in any decision regarding this house since it happened.

masonic

That is correct. It is ownership or part-ownership that disqualifies you. The circumstances around how you acquired the interest do not matter.

Keep_pedalling

Having an interest in an estate is not the same as having an interest in a specific property. If no one has completed the administration then legally the property is still owned by the estate.

If this was a UK property you would not be classed as a part owner, providing the executors sold the house within the estate and distributed the proceeds as cash. This may different with overseas property where inheritance laws will be different. Which country is this house in? Where was your father domiciled at the time of his death?

Mo009

The property is in Poland. I do not have any interest from this house as my family has never rented it nor will I have any income from it in the future. I think this law is very bizzare as I was a minor at the time so I had to accept the will, now I am not able to use it towards buying my actual property.

eskbanker

Mo009 said:

The property is in Poland. I do not have any interest from this house as my family has never rented it nor will I have any income from it in the future. I think this law is very bizzare as I was a minor at the time so I had to accept the will, now I am not able to use it towards buying my actual property.

Just to be clear, the stipulation relates to having an interest in property, not earning interest from it....

If you've just found out that the property is being sold, won't your 1/8 share of the proceeds effectively more than compensate you for the two or three grand you'll be missing out on from not being able to use a LISA to support a UK property purchase?

Emily_Joy

eskbanker said:

Mo009 said:

The property is in Poland. I do not have any interest from this house as my family has never rented it nor will I have any income from it in the future. I think this law is very bizzare as I was a minor at the time so I had to accept the will, now I am not able to use it towards buying my actual property.

Just to be clear, the stipulation relates to having an interest in property, not earning interest from it....

If you've just found out that the property is being sold, won't your 1/8 share of the proceeds effectively more than compensate you for the two or three grand you'll be missing out on from not being able to use a LISA to support a UK property purchase?

How did you come to two or three grand? The OP could have over 20K in Lisa if they contributed for some time. If the OP is about 30 years old now, this 20K are in Lisa for another 30 years! 

eskbanker

Emily_Joy said:

eskbanker said:

Mo009 said:

The property is in Poland. I do not have any interest from this house as my family has never rented it nor will I have any income from it in the future. I think this law is very bizzare as I was a minor at the time so I had to accept the will, now I am not able to use it towards buying my actual property.

Just to be clear, the stipulation relates to having an interest in property, not earning interest from it....

If you've just found out that the property is being sold, won't your 1/8 share of the proceeds effectively more than compensate you for the two or three grand you'll be missing out on from not being able to use a LISA to support a UK property purchase?

How did you come to two or three grand? The OP could have over 20K in Lisa if they contributed for some time. If the OP is about 30 years old now, this 20K are in Lisa for another 30 years! 

I was meaning two or three grand in terms of what would be forfeited as a result of what OP had built up between opening the account a couple of years ago and now realising that they're not eligible to use it towards a property purchase, i.e. since OP was never going to be eligible under the scheme rules, there's no point in hypothesising about a longer timescale.