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Who is LISA?
The Government Help to Buy ISA Scheme for first time buyers closed to new applicants at the end of November 2019. If you opened an account in time you can continue to save into it until November 2029 and you then have a year to claim the bonus.
However, if you missed the deadline, you can still open a Lifetime ISA (LISA). The LISA lets you save up to £4,000 a year towards your first home . The Government will give you a 25% bonus on your savings meaning that if you pay in the maximum amount in a year, you will receive a bonus of £1,000 that year. Plus you also earn in interest on whatever you save, and as it is an ISA, the interest and bonus is tax-free.
Who can open a LISA?
Anyone who qualifies as a first time buyer and is aged 18 to 39 can open a LISA and if you open one before you are 40, you can continue to put money into the LISA until the day before your 50th birthday. Each person can have their own LISA so couples can have one each and essentially double the bonus on their property purchase.
What can I use my LISA for?
To claim the bonus you need to buy a residential property that costs £450,000 or less, with a mortgage. The LISA is intended to help you buy your first home so you are not supposed to rent it out. You can use the LISA with right to buy, shared ownership, self-builds and Help to Buy loans.
You need to have the LISA open for at least a year to be able to use it towards your first home. Your LISA provider will transfer the cash, including the bonus, directly to your conveyancer to use towards your deposit at exchange of contracts.
If you would like to use your Help to Buy ISA or Lifetime ISA to purchase your first home, please contact Rebecca West.