Rules and restrictions when using your Lifetime ISA to purchase your 1st home
- The home must be your first property or interest/share in a property in the UK
- The home you are purchasing must have a final sale price £450,000 or less
- If you have a Help to Buy ISA, you will only be able to use the bonus from one of them to buy your first property. Learn more about Help to Buy ISAs and the Lifetime ISA >
- You have to live in the home as your primary residence (i.e. it can’t be used to purchase a buy-to-let property). If the home is being built, you must live in it once it’s finished.
- Your Lifetime ISA must be open for at least 12 months before you can withdraw funds from it to buy your first home.
- You can use your deposit for a shared ownership property (even if it’s not the other purchasers’ first property), but it must still be your first, and the overall value of the house can’t exceed the £450,000 limit.
- Your total withdrawal amount for the purposes of purchasing the property must be less than the cost of the property. You can make a partial withdrawal from your Lifetime ISA to meet this requirement if necessary, in which case the remainder would stay invested and could be withdrawn after age 60.
- The purchase must be completed within 90 days of the withdrawal from your Lifetime ISA
- The property must be purchased using a mortgage (excluding a Buy-to-Let Mortgage)
- The purchase must be of a ‘legal interest in land’ (i.e. not a houseboat)
How it works
When you purchase a home, you’ll need to work with a licensed conveyancer — a person who will deal with all legal matters, administration, finance and queries involved in the sale. This also holds true when it comes to using your Lifetime ISA money. Roughly speaking, the process will look like this:
- You and your conveyancer will each complete declarations and submit them to Nutmeg
- We’ll process the withdrawal, sending the money directly to your conveyancer
- Your conveyancer will use the money as part of the home purchase. If the purchase falls through (is not completed within 90 days of the withdrawal), your conveyancer is required to return the money to your Nutmeg Lifetime ISA account.
Note that you cannot serve as your own conveyancer, and you should ensure that your conveyancer is properly licensed. Not sure where to begin? Learn more about conveyancers at the Money Advice Service.
The process can be complex, but we’ll walk you through it every step of the way. Here’s how to get started:
- Download the investor declaration
- Complete the details
- Post it to us
Simultaneously, you’ll need to:
- Tell your conveyancer that you have a Lifetime ISA that you’d like to use for your home purchase
- Download the conveyancer declaration and send it (or send the link) to your conveyancer
- Ask them to complete the details and post the declaration to us. We can’t start the withdrawal process until we receive both signed declarations, and it’s your responsibility to ensure that your conveyancer does their part.
What happens next
We must receive both declarations to proceed, so once you’ve sent yours, be sure to ask your conveyancer to send theirs. Once we receive both declarations:
- We’ll compare the declarations and ensure that the information is matching, and follow up individually if any information is missing.
- When all is in order, we’ll process the free withdrawal at our next investing cycle and send the money directly to your conveyancer, not to your bank account. We’ll be sure to notify you when we do so.
- From there, your conveyancer will work to complete the purchase, using the money.
- Once the sale completes, your conveyancer is required to notify us within 10 business days. It is your responsibility to ensure that your conveyancer notifies us.
- If the purchase does not complete within 90 days for any reason (for example, if any of the parties withdraw), your conveyancer must return the money to Nutmeg, after which we’ll reinvest it for you as before and your Lifetime ISA will remain active.
If you have any questions, please get in touch before you proceed.