The short answer
A Lifetime ISA can accept up to £4,000 each tax year and the government adds a 25% bonus, up to £1,000 a year. To open one you must be aged 18 to 39. Contributions and bonuses can continue until 50. For a qualifying first-home purchase, the property must cost £450,000 or less, the account must have been funded for at least 12 months, the purchase must use a mortgage, and the provider pays the money to your conveyancer.
The rules that catch buyers out
- The clock starts with the first payment: opening an empty account does not begin the 12-month qualifying period.
- The £450,000 ceiling is a hard purchase-price limit: it is not higher in London.
- Both joint buyers can use a LISA: each person must independently be a qualifying first-time buyer. A non-first-time buyer can buy with you, but cannot make a qualifying LISA withdrawal.
- The money goes through a conveyancer: it is not withdrawn into your current account for exchange or completion.
- Other early withdrawals normally face a 25% charge: because it applies to the whole withdrawal, it removes the bonus and some of the saver’s original money when there has been no growth.
Worked example
You contribute £4,000 and receive a £1,000 bonus, producing £5,000 before interest or investment movement. An unauthorised withdrawal of that whole £5,000 would incur a £1,250 charge and leave £3,750. That is £250 less than the original contribution. For a qualifying home purchase, no withdrawal charge applies.
Cash or stocks and shares?
A cash LISA avoids investment-market falls and may suit a near-term, fixed purchase target. A stocks-and-shares LISA can rise or fall and is generally a poor place for deposit money that must be available on a particular date. This is a risk decision, not simply a comparison of advertised returns.
Plan the rest of the purchase
The LISA is only one part of the cash requirement. Keep tax, legal work, survey, mortgage fees, moving costs and an emergency reserve separate from the deposit. Test the full plan with the buying-power calculator and moving-cost planner.
Check the rules before acting
Read the current GOV.UK Lifetime ISA overview and first-home withdrawal conditions. The government was consulting in 2026 on a future replacement product; that is not the same as a rule already in force. Confirm the live position with your provider and conveyancer before relying on the money.
Limitations and corrections
This is general information, not savings, investment, tax or mortgage advice. Eligibility can turn on ownership history and transaction structure. Send corrections to hello@propertiesandhomes.co.uk.
Reviewed by the Properties & Homes editorial team
Published and last reviewed: 14 August 2026.
Change log: first edition.