Shrewsbury, Abbey House 01743 285 888
Shrewsbury, Talbot House 01743 218 450
Telford 01952 297 979
Newport 01952 810 307
Bridgnorth 01746 768 748
Whilst many first-time buyers are now familiar with the Help-to-Buy ISA since its introduction, very few people are aware of the Lifetime ISA that may also be used for additional support when purchasing a property for the first time. The Lifetime ISA scheme was launched in 2017; however, very little attention was brought to it and even now, one year later, very few potential purchasers are aware of its existence and the benefits that it may provide.
Trainee Solicitor, Mike Anson who is based at our Telford office, comments
“So how can the Lifetime ISA assist those looking to get their foot on the property ladder? The overall idea is that account-holders receive a 25% bonus for each tax year on everything that is paid in to the ISA. Naturally, with this level of return there is a limit to what can be deposited and the overall cap on this amount is £4,000.00 per year. This £4,000.00 can be invested steadily over the course of 12 months, or a lump-sum transfer can be made. With the potential to receive a £1,000.00 tax-free bonus for each year, saving for a first home with a Lifetime ISA can be extremely rewarding for those who are aware of the scheme.
The government aims to ensure that this scheme remains open to as many people as possible; therefore, the criteria for opening and benefitting from a Lifetime ISA remains fairly non-restrictive. To open a Lifetime ISA account one must be between the ages of 18 and 40 and, to benefit as a first-time buyer, must have never owned a property anywhere in the world. This does include property outside of the UK and will also catch out individuals who acquired a share in a property via an inheritance, even if this property was immediately sold and residency was never taken up. Also, as the scheme is to help struggling first-time buyers, the maximum purchase price of the property for the bonus to remain valid is £450,000.00 and the property cannot be a Buy-to-Let investment. If you have paid in to the Lifetime ISA and the property that you are purchasing does not qualify, then withdrawal of your funds from the scheme will carry a 25% withdrawal penalty. As an added criteria, the Lifetime ISA must have been open for at least one year prior to withdrawal of funds from the account.
It isn’t all bad news if you do have a Lifetime ISA but cannot use this towards your first property purchase, as the benefit of the Lifetime ISA is that it can also be used to save for retirement. At Terry Jones Solicitors we have assisted numerous purchasers who have used both the Help-to-Buy ISA and the Lifetime ISA scheme and will gladly assist with any queries that readers may have with reference to the same.”
To contact them please email firstname.lastname@example.org or ring Mike Anson on 01952 297979.
Need advice? Email us email@example.com