Step by step: How to withdraw money from your Lifetime ISA to fund your first home
Chances are, if you're reading this article then you’ve been saving hard and it could be time to use your Lifetime ISA savings to buy your first home!
If you want to use your savings before you’ve had your account for 12 months, you’ll have to pay a 25% Government charge on your withdrawal. So if you do this, you may get back less than you put in.
If you are ready to use your Lifetime ISA funds as a first time buyer, here is a step by step guide on how to get your funds from your account to your conveyancer to pay your deposit. As you’re using your Lifetime ISA savings for your first home, you’ll be able to use it for your house deposit on a property that is valued at £450,000 or less.
The process for taking out your money from your Lifetime ISA is set out by HMRC. If you are buying with another first time buyer, you can both use your Lifetime ISA savings and the bonus towards your first house and you will both have to go through these steps with your conveyancer.
- Download a declaration form provided by HMRC, fill it in and give it to your conveyancer.
- Your conveyancer gives their own declaration to us here at The Nottingham.
- Within 30 days of receiving the conveyancer declaration, The Nottingham will transfer the funds to them.
- Within 10 days of sale completion, the conveyancer will notify us of the details to confirm that the funds have been used.
If completion does not take place within 90 days of the withdrawal, a further 90 days extension can be requested by the conveyancer. If the property purchase falls through, the money must be returned to The Nottingham by the conveyancer within 10 days. The money will be paid back into your Lifetime ISA account. If the conveyancer returns less than the amount initially withdrawn, you will be charged the 25% Government withdrawal fee on the shortfall amount.
If you’re not ready for completing and exchanging just yet and you’re wondering what all the Lifetime ISA fuss is about, check out all you’ll need to know about this product in our #LoveMyLISA Hub.