Can I Use a LISA for Any House?

The one-sentence answer

No. You can only use a UK LISA penalty-free for your first UK home, priced £450,000 or under, bought with a mortgage, and lived in as your main residence.

The five conditions in full

1. First-time buyer. You must never have owned any residential property anywhere in the world — including inherited or trust-held property in some cases.
2. Price cap: £450,000. Applies UK-wide, including London.
3. Mortgage-funded. Cash purchases don't qualify.
4. UK property. The home must be in the UK. Overseas purchases don't qualify even if all other criteria are met.
5. Your main residence. You must intend to live in the property yourself. Buy-to-let doesn't qualify.

Which houses DO qualify?

• First UK home priced £450k or under, bought with a mortgage, to live in ✅
• New-build or existing property ✅
• Freehold or leasehold ✅
• Flat, house, bungalow, or maisonette ✅
• Shared ownership (up to the price cap on your share plus market value of remaining share, depending on interpretation — confirm with your provider) ✅ usually

Which houses DON'T qualify?

• Any property over £450,000 ❌
• Second homes ❌
• Buy-to-let ❌
• Holiday homes ❌
• Property purchased without a mortgage ❌
• Overseas property ❌
• Properties bought jointly where one buyer is not a first-time buyer (LISA money still qualifies for the first-timer's portion, but check with your solicitor) — partial ❌
• Property bought through a company structure ❌

The £450,000 trap

The £450k cap was set in 2017 and has not moved since. UK average house prices have risen ~30% in that time. In much of London and the South East, £450k excludes typical first homes — which means LISA holders in those regions face a hard decision: buy a cheaper property, buy elsewhere, or forfeit the LISA bonus by paying the 25% charge on withdrawal for a £450k+ property.

The government has not signalled any intention to raise the £450k cap. If you're saving into a LISA now for a purchase 5+ years away in a rising-price area, factor in the possibility that your target home may cross £450k before you buy.

What happens if I buy a £450k+ house anyway?

You have two options:

1. Use the LISA anyway and pay the 25% charge. You'll effectively lose about 6.25% of your original LISA contribution. See how much you lose withdrawing from a LISA for the maths.
2. Fund the £450k+ purchase from non-LISA savings. Leave the LISA intact until age 60 for retirement — you keep the bonus and the tax-free growth.

Related pages

• Can I use a LISA for a house deposit? — full guide
• All LISA penalty exceptions
• LISA penalty calculator
• How much do I lose withdrawing from a LISA?
• Lifetime ISA vs Help to Buy ISA
• Best Lifetime ISAs UK