Guidance: Conveyancers: Lifetime ISA technical guidance

From 6 April 2018 funds (including any bonus) can be withdrawn from a Lifetime ISA to put towards a first time residential purchase.

This guidance provides further information for conveyancers about a first time residential purchase with a Lifetime ISA.

A Lifetime ISA investor can buy jointly with others, whether or not they’re also first time purchasers and regardless of how they’re funding the purchase.

There’s no limit in the ISA legislation for the number of individuals who can purchase a single residential property.

If more than one Lifetime ISA investor is jointly purchasing a residential property, each investor must:

Lifetime ISA investors can purchase a property as a joint owner with a person who already owns the property, but this is also subject to the conditions of the Lifetime ISA being satisfied.

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 full sale price of the property is used 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.

The purchase must be of a ‘legal interest in land’.

A purchase of a property which doesn’t provide a legal interest in land - such as a houseboat - doesn’t satisfy the Lifetime ISA rules.

The purchase of land for a self-build property would potentially satisfy the rules.

When the purchase is complete the Lifetime ISA investor must occupy the property as their only or main residence.