Lifetime ISAs guide

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  • Hilloh92
    Hilloh92 Posts: 1 Newbie
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    Sorry in advance If this has already been asked on this forum!

    I understand that in order to use the government bonus when buying a property the first time buyer needs to have the intention to live in the property. However, what if you have the intention to live In the property in the long term but due to work commitments you need to rent out the property first. Could you still use the government bonus?

    I have seen the discussios regarding the Treasury taking a 'common sense' approach to first time buyers wanted to rent out a property after they have lived in it for a while. So I am just wondering whether the opposite is true too.
  • masonic
    masonic Posts: 23,374 Forumite
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    russjj wrote: »
    Alexland - thank you for your reply, fully agree a Lifetime ISA does not lose value however the cash is infinitely more valuable now rather than 30 years later (even with growth)!
    Yes, and I should think completing sooner rather than later is preferable than delaying for an extra (up to) £250.
    Additionally, for a Cash LISA, I don't understand why the bonus is paid monthly rather than at the time of use - this makes life more difficult for house buyers and adds nothing for savers, only benefit is for S&S LISAs
    What's the benefit of being paid monthly in arrears for S&S LISAs? I'll grant you it is better than being paid once after the end of the tax year, but if that was the rule, home-buyers would be up in arms. Leaving aside the fact that HMRC does not differentiate between S&S and cash LISAs, making the rules different for cash vs S&S would penalise those of us who are using a S&S LISA with a possible intention of making a withdrawal for a house purchase in the future.

    The reason HMRC doesn't want a steady stream of bonus applications coming in throughout the month is because the scheme would be a nightmare for them to manage. Likewise, the providers would have to do more leg-work if the system worked like the HTB ISA scheme - and you'd still potentially be waiting up to 30 days for your bonus.
  • masonic
    masonic Posts: 23,374 Forumite
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    Hilloh92 wrote: »
    I understand that in order to use the government bonus when buying a property the first time buyer needs to have the intention to live in the property. However, what if you have the intention to live In the property in the long term but due to work commitments you need to rent out the property first. Could you still use the government bonus?
    How would you be able to get a residential mortgage without living in the property? A residential (not-BTL) mortgage is a pre-requisite of using a LISA towards your purchase without paying the penalty.
  • PompeyJamie
    PompeyJamie Posts: 1 Newbie
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    Sorry if this has been asked already. I have been trying to look up the answer to this but can not find an answer. If I were to get a LISA I would like to use it as a Help to Buy. The Help to Buy is capped at £12,000 and a bonus of £3,000.

    My question is this. If I do a LISA and put £4,000 in a year, getting the bonus £1,000, per year can I use more than the £12,000 (with £3,000 bonus) that the Help to Buy limits you to on a house purchase, or does the same limit apply?
    For example. £16,000 (with £4,000 bonus) after 4 years or £20,000 (with £5,000 bouns) Then not bother with carrying on with the LISA after purchasing a house.
    Thanks in advance.
  • masonic
    masonic Posts: 23,374 Forumite
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    To my knowledge, there is no limit on the amount of money you can withdraw penalty free for a qualifying house purchase.
  • Alexland
    Alexland Posts: 9,665 Forumite
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    masonic wrote: »
    To my knowledge, there is no limit on the amount of money you can withdraw penalty free for a qualifying house purchase.


    That's correct the LISA does not have the £3k HTB ISA bonus limit.
  • Alexland
    Alexland Posts: 9,665 Forumite
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    Alexland wrote: »
    HL just confirmed my wife will need to wait up to 1 month following her transfer completion date to receive her bonus for last tax year.

    HL still haven't paid my wife's LISA bonus from last tax year. Their most recent broken promise was that it would be in the account yesterday so I just messaged them again...

    Alex
  • Alexland
    Alexland Posts: 9,665 Forumite
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    Update: they just paid the bonus!
  • CashCruncher
    CashCruncher Posts: 3 Newbie
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    I'm still having issues... No bonus paid yet for my 2017 contributions :(
  • ALTAYLOR
    ALTAYLOR Posts: 1 Newbie
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    Hi all,

    Does anybody know if you can buy a property using a LISA with the sole intention of renting it out? I know that there are rules stating this isn't possible, but due to being in the armed forces, I constantly live in a barracks and was wondering if this situation fell under "exceptional circumstances"

    Hope someone can help,

    Many thanks,

    Alex
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