Can interest from a LISA be used for your 1st time buyers first property?

Cockapoox2

My daughter has just been told by a solicitor that the 4 x £1000 that has been added to her 4 year LISA cannot be used for her 1st time buyer deposit and only the 4x£4000 she has added can be used.  I cannot see this anywhere on your pages, could someone clarify for me please? 

eskbanker

The entire balance can definitely be used, there must have been some crossed wires somewhere!

GrumpyDil

eskbanker said:

The entire balance can definitely be used, there must have been some crossed wires somewhere!

Or you need a new solicitor.

RedFraggle

Does it meet the criteria?
The home must:

be in the UK 

be the first home you own

be purchased with a mortgage (i.e. not cash)

cost £450,000 or less

be where you live.

You can also buy with another first-time buyer and both use a LISA and bonus, however the rules above still apply. Or you can use it to buy with someone who isn’t a first-time buyer, though they can’t use their own LISA towards the purchase.

If you’re thinking of taking advantage of a shared ownership scheme, then the total price of the property – so your percentage of equity plus the remaining equity – must be £450,000 or less.

dcs34

Just to be clear the £1k from HMRC is the Government Bonus (not Interest). Presumably the LISA account has earnt Interest from the savings provider.

All the balance in the LISA is eligible. Suggest you ask the solicitor to specify where they are drawing that guidance from.

masonic

This is pretty basic stuff, so I would worry what else this solicitor would get wrong in the process. I would be having a conversation about professional liability insurance if you decide to push forward with this solicitor.

epm-84

Any remaining balance after the first purchase is complete has to remain in the account until she reaches 60, otherwise the 25% withdrawal penalty applies. So most people would probably want to withdraw everything and she should be pushing the solicitor for that, if that's want she wants - maybe leave at least £1 in if she's over 40.