Lifetime ISA withdrawals for a first time residential purchase

Withdrawals for a first time residential purchase

Investors can make withdrawals from a Lifetime ISA if the funds are going towards the purchase price of their first residential property in the UK. This includes when the investor makes the purchase:

There’s no minimum amount that must be withdrawn from a Lifetime ISA. Investors can make one single or several charge-free withdrawals from a Lifetime ISA for a first time residential purchase if:

There is a 20% withdrawal charge if investors take money out of their Lifetime ISA for a first time residential property purchase and the property value is above £450,000.

As of 6 April 2024, the property purchase cannot be funded by a legal mortgage where the parties are connected. The definition of a connected person is set out in section 993 of the Income Tax Act 2007. Where a property is purchased using a mortgage funded by a connected person there will be a withdrawal charge.

The investor must purchase a residential property that includes a ‘legal interest in land’.

If the purchase does not include a ‘legal interest in land’, such as a houseboat, or when the investor intends to build a residential property on land they already own, then they must pay a withdrawal charge.

Lifetime ISA investors can also purchase a residential property either: