Using a Lifetime ISA for a First Home: What Are the Rules?

gov.uk says Lifetime ISA savings can be used towards a first home if the property costs £450,000 or less, the purchase is at least 12 months after the first payment into the account, a conveyancer or solicitor acts for the buyer, and the buyer is buying with a mortgage. For the 2026-27 tax year the government adds a 25% bonus, up to £1,000 a year, on payments of up to £4,000.

The site's rules data was last checked against gov.uk on 26 September 2026. Figures typed in this guide may not yet reflect a later change, and the descriptions of gov.uk pages are summaries that may also lag. The current figures are on the ISA rules at a glance page. General information only, not financial advice.

How does a Lifetime ISA work for a first home?

gov.uk says you can use a Lifetime ISA to buy your first home or save for later life, and that the government adds a 25% bonus to your savings, up to a maximum of £1,000 per year (GOV.UK Lifetime ISA overview). You can put in up to £4,000 each year until you are 50, and that limit counts towards the annual ISA limit of £20,000. The account can be opened from age 18 to age 39: gov.uk says you must be 18 or over but under 40 (who can open a Lifetime ISA).

The pages read for this guide do not say when during the year the bonus is credited, so the timing is a question for each provider.

What are the conditions for using it towards a first home?

gov.uk says you can use your savings to help you buy your first home if all of the following apply (withdrawing money from your Lifetime ISA):

Price. The property costs £450,000 or less. gov.uk gives this as a single figure, with no variation by location.
Timing. You buy the property at least 12 months after you make your first payment into the Lifetime ISA. Opening an account when house-hunting starts will not make the money usable straight away.
Conveyancer. A conveyancer or solicitor acts for you in the purchase, and the ISA provider pays the funds directly to them.
Mortgage. You are buying with a mortgage. gov.uk also says you cannot use the savings if the private mortgage comes from a relative (parent, grandparent, child, grandchild or sibling), or from certain people connected to them or to your spouse or civil partner.

The page does not define "first home" or "first-time buyer" in detail, so check its current wording and ask the provider or conveyancer how it applies to a particular case.

What if the home is bought with someone else?

gov.uk says that if the person you are buying with has a Lifetime ISA, you can both use your savings and government bonus, provided you are both first-time buyers and both meet all the first-home conditions. The pages read do not say how a purchase is treated if only one buyer is a first-time buyer, so ask both providers and the conveyancer. Each account belongs to one person, because gov.uk's ISA overview says you cannot hold an ISA with someone else.

How much could the bonus add to a deposit?

The figures are assumptions for the arithmetic, not a forecast. A saver opens a Lifetime ISA and pays in £2,800 a year for five years before buying a first home. As a monthly amount, £2,800 a year is roughly £233 a month; as a simpler comparison, £200 a month is £2,400 a year and earns a £600 bonus.

Paid in over five years: £2,800 × 5 = £14,000.
Bonus at 25%: £700 a year × 5 = £3,500.
Total before any interest or investment growth: £17,500.

On a property priced at £250,000 with an assumed 10% deposit of £25,000, the £3,500 bonus would be 14% of the deposit. If the account were a stocks and shares Lifetime ISA, growth could add to the total or the value could fall. As one assumed case, with £3,500 added at the end of each year and growth of 4% a year, the five-year total would be about £18,957, which is £1,457 above £17,500. A fall in value near the purchase date would reduce it. The Lifetime ISA calculator can run other amounts, and its results are illustrations, not forecasts.

How does the money reach the seller?

The savings are not withdrawn by the buyer. gov.uk says the ISA provider pays the funds directly to the conveyancer or solicitor, who applies them to the purchase. The pages read do not describe the steps a provider needs, how long the process takes, or what happens to the funds if a purchase falls through, so ask the provider and the conveyancer early. gov.uk says you must be buying with a mortgage, and for the borrowing side the Mortgage Savings Calculator site covers repayments and overpayments.

Cash or stocks and shares for a first-home saver?

gov.uk says a Lifetime ISA can hold cash or stocks and shares, or a combination of both. A cash version earns interest and its value does not move with markets, subject to the provider's terms and any FSCS cover (the pages read do not say whether a given account is covered, so ask the provider or FSCS). A stocks and shares version has the potential to grow more but can fall in value, including close to the purchase date. The timeline, from a purchase soon to one many years away, is one of the points that bears on the choice. Compare options on the Stocks & Shares ISA Calculator with assumed rates, which are illustrations, not forecasts.

What happens if the money is withdrawn for another reason?

gov.uk says a withdrawal for any reason other than the charge-free situations attracts a 25% charge, and that if the whole pot is withdrawn the charge applies to the total amount in the ISA, including the bonus. The charge-free situations are buying a first home, being 60 or over, and terminal illness with less than 12 months to live. With the figures above, a pot of £17,500 would attract a charge of 25% of £17,500, which is £4,375, leaving £13,125, or £875 less than the £14,000 paid in.

A property above the £450,000 limit does not meet the conditions, so using the funds for it would also attract the charge.

How does it sit alongside other ISAs and a Help to Buy ISA?

A Lifetime ISA payment counts towards the overall £20,000 allowance, and gov.uk says you can only pay into one Lifetime ISA in a tax year (how ISAs work). gov.uk says that if you hold a Help to Buy ISA as well as a Lifetime ISA, you can only use the government bonus from one of them to buy your first home. The Advanced ISA Planner shows multi-year illustrations across ISA types.

What to check before using a Lifetime ISA for a first home

Is the account at least 12 months old, counted from the first payment?
Is the property price at or under the £450,000 limit?
Will a mortgage be used, and is any part of it a private mortgage from a relative?
If buying with someone else, are both first-time buyers?
Is a Help to Buy ISA also held?
How does the provider release the funds, and how long does it take?

Frequently asked questions

How long before buying must I have had a Lifetime ISA?

gov.uk says the purchase must be at least 12 months after the first payment into the Lifetime ISA. The period is counted from the first payment, not from the date the account was opened.

Does the Lifetime ISA money go to me or to the conveyancer?

gov.uk says the ISA provider pays the funds directly to the conveyancer or solicitor acting for the buyer. The buyer does not receive the money first.

Do I need a mortgage to use a Lifetime ISA for a first home?

gov.uk says one condition is that you are buying with a mortgage. It also says the savings cannot be used if the private mortgage comes from a relative.

Can a Lifetime ISA be used for a property above the price limit?

Not without the withdrawal charge. gov.uk gives £450,000 or less as a condition, and a withdrawal that does not meet the conditions attracts the 25% charge.

This guide does not constitute financial advice. Your personal situation, tax position, and savings goals may mean different strategies are appropriate. Consider speaking to a regulated financial adviser if you are uncertain.