Can I Use a Lifetime ISA for a House Deposit? UK 2026/27

The short answer

Yes — the Lifetime ISA was designed for exactly this. You can use the full balance, including the 25% government bonus and any growth, toward the deposit on your first home, with no penalty. But four conditions have to be met. Get any of them wrong and the 25% withdrawal charge applies to the whole withdrawal, costing you roughly 6.25% of your original contributions (see our LISA Penalty Calculator).

The four rules

1. The LISA must have been open for at least 12 months

Counting from your first contribution. If you opened the LISA on 15 March and made a contribution that day, you can use the funds for a penalty-free first-home withdrawal from 15 March the following year. Until then, any withdrawal triggers the 25% charge — even if everything else is in order.

This is the single most common reason buyers get stung. If you're 6–9 months from a planned purchase, opening a LISA today and contributing a small amount immediately starts the 12-month clock. Topping up later still works, provided the account itself has been open the required period.

2. The property must cost £450,000 or less

Across the UK. London, Manchester, anywhere. The cap is on the property purchase price — not on the mortgage, not on your share of the property. If you're buying with a partner and the property is £475,000, the cap is exceeded and neither of you can use a LISA penalty-free for that purchase.

The cap hasn't moved since LISA launch in 2017. With UK house price inflation, it constrains more buyers each year — particularly in London and the South East. If you're targeting close to the cap, plan negotiation room.

3. You must be a first-time buyer

HMRC defines a first-time buyer as someone who has never owned a residential property (or a share of one), anywhere in the world. Inheriting a property counts. Owning a buy-to-let counts. Owning a share of a parental home counts.

The first-time buyer test applies individually. If you've never owned a home but your partner has, you can still use your LISA — your partner is buying as a non-first-time buyer, but your individual LISA eligibility is intact.

4. You must use a UK conveyancer or solicitor

LISA funds for a first-home purchase have to be released directly to a UK-regulated conveyancer or solicitor handling the transaction. You cannot withdraw the money to your own bank account and then pass it to the solicitor. The provider transfers the funds based on a model declaration the solicitor completes.

The solicitor must use the funds for the purchase within 90 days. If completion takes longer, the funds must be returned to the LISA. The 12-month opening rule does not reset on returned funds.

How the withdrawal works in practice

1. Memorandum of sale issued. Your offer is accepted and the property is taken off the market.
2. Instruct your conveyancer. Tell them you intend to use a LISA for the deposit. They'll need your LISA provider's details.
3. Conveyancer requests the LISA forms from your provider. Each provider has a standard form set — Moneybox, AJ Bell, Nutmeg, Dodl all run their own process but mechanically similar.
4. Eligibility declaration completed. Your solicitor confirms property price, buyer eligibility, and the intended use of the funds.
5. Provider releases funds to the solicitor. Typically within 30 days of declaration.
6. Completion happens. Funds applied to the purchase. The LISA is now empty (or partially used, if you withdrew less than the full balance).

Two-thirds of LISA savers we've spoken to underestimate how administratively smooth this is. Provided you've met the 12-month rule and the property is under £450,000, the conveyancing process handles the rest.

Common mistakes

Opening the LISA after offers are accepted

The 12-month rule catches buyers who only learned about the LISA after starting their search. There is no shortcut around this rule.

Targeting a property right at £450,000

If the seller accepts £451,000, you cannot use the LISA without penalty. Build negotiation room — or have a fallback funding source ready.

Withdrawing to your own account first

This converts a penalty-free first-home withdrawal into an unauthorised withdrawal, subject to the 25% charge. Always have the conveyancer instruct the LISA provider directly.

Buying a property with a buy-to-let intention

The property must become your main residence. Buying to rent out — even briefly — voids the penalty-free withdrawal.

Forgetting partner first-time-buyer status

If you're using two LISAs for a joint purchase, both partners must individually qualify as first-time buyers. One partner having previously owned property invalidates that partner's LISA use.

Partial vs full withdrawal

You don't have to withdraw the whole LISA balance. You can take only what you need for the deposit and leave the rest in the wrapper — where it continues to be invested or earn interest, and where you can continue contributing up to age 50. Any remaining balance becomes accessible (without penalty) from age 60. For LISA savers who want to use the wrapper for both first-home and retirement, this matters: you don't have to choose one or the other.

What if your purchase falls through

Funds released to a solicitor can be returned to the LISA without triggering the penalty, provided the return happens within 90 days. The 12-month opening rule clock continues — it doesn't restart. So if the purchase fails after 18 months of holding the LISA, you remain eligible for a future penalty-free withdrawal as soon as you find another qualifying property.

Before you withdraw

Run our LISA Penalty Calculator to model your options. If you're choosing a provider for a new LISA, see Best Lifetime ISAs UK. If you also hold a Help to Buy ISA, read LISA vs Help to Buy ISA for how to play both.

Frequently asked questions

Can I use a LISA for a second home?

No. The LISA penalty-free withdrawal only applies to your first residential home purchase. Buy-to-let properties, second homes and overseas properties are all excluded.

What if my partner already owns a home — can I still use my LISA?

Yes, if you yourself are a first-time buyer. Your partner's ownership history doesn't affect your individual LISA eligibility. The property does need to become your main residence though.

Can the LISA bonus be used for the exchange deposit?

Yes. Unlike the Help to Buy ISA, the LISA bonus is in your account during the saving phase and is available to use at exchange via your conveyancing solicitor.

What if the property purchase falls through?

Funds released to your solicitor can be returned to your LISA without penalty, provided the return happens within 90 days of the original withdrawal. The 12-month opening rule clock doesn't restart.

Do I have to use a solicitor or conveyancer?

Yes. LISA funds for a first-home purchase can only be released to a UK-regulated conveyancer or solicitor handling the transaction. You cannot withdraw the money to your own bank account and then use it for the deposit.

What's the time limit between LISA withdrawal and completion?

90 days from release to completion. If completion doesn't happen within 90 days, the funds must be returned to the LISA or treated as an unauthorised withdrawal.

What documentation does my solicitor need?

Your LISA provider will give your conveyancer a model declaration to complete, confirming the buyer's eligibility, property value, and intended use. The provider handles the funds transfer directly.