Can you use two Lifetime ISAs to buy a house?
If you’re saving a house deposit, a Lifetime ISA (LISA) can help you reach your goal sooner. Save up to £4,000 a per tax year and the government will boost your savings by 25% - giving you up to £1,000 a year free towards your first home. But can you use two Lifetime ISAs to buy a house? Here’s everything you need to know about using more than one Lifetime ISA.
In this guide
How many Lifetime ISAs can I have?
You can have more than one Lifetime ISA, but there are a couple of things you need to know before opening multiple LISAs. First, you can only pay into one Lifetime ISA per tax year. So while it’s possible to open a second Lifetime ISA - for example, if you want to open both a Stocks & Shares Lifetime ISA to a Cash Lifetime ISA - you’ll need to decide which one you’ll fund for the current tax year.
Second, if you’re saving a deposit and you have more than one Lifetime ISA, you can only claim the 25% bonus on one of them when buying your first property. You could use any savings or investments held in an additional Lifetime ISA for retirement.
Can you use two Lifetime ISAs to buy a house?
The only way you can use multiple Lifetime ISA to buy a house is if you’re buying a home with a partner or friend who’s also a first-time buyer. By opening a Lifetime ISA each, you can effectively double your government bonus. Max out your Lifetime ISAs five years in a row, for example, and you’ll save £40,000 between you and get a £10,000 LISA bonus towards an eligible property. And that’s before any interest or investment growth
Learn more: How many Cash ISAs can I have?
Important!
When you’re ready to buy, you’ll need to ask your solicitor to withdraw your LISA savings for you. If you withdraw the money yourself, you’ll be charged a 25% fee on the amount you withdraw, meaning you may get back less than you paid in. You can withdraw the money from your Cash ISA at any time, without needing to involve your solicitor.
Can I have a Lifetime ISA and a Help to Buy ISA?
Yes, you can have both a Lifetime ISA and a Help to Buy ISA, but you can only use the government bonus from one when buying your first home. That’s because both accounts are designed to help first-time buyers, and the government only allows one bonus per person per property purchase.
Wondering which one is right for you? Take a look at our guide to the differences between a LISA and a Help to Buy ISA to learn more.
If you already have a Help to Buy ISA and you want to open a Lifetime ISA, you’ll need to work out whether to keep both or switch.
If you’d like to switch from your Help to Buy ISA to a Lifetime ISA, you’ll need to do this yourself by withdrawing the funds from your Help to Buy ISA and depositing them into your new LISA. You can do this penalty-free, as the Help to Buy ISA lets you withdraw your funds without any charges.
However, since you can only deposit up to £4,000 per tax year into a Lifetime ISA, if you have more than this in your Help to Buy ISA, you’ll need to wait until the following tax year to move over more of your savings.
And remember that you need to have your Lifetime ISA open for 12 months before using it to buy a home, so if you’re hoping to buy in a shorter time frame, you’ll be better off sticking with your Help to Buy ISA.
Keep reading: What are the differences between a LISA and a Help to Buy ISA?
Can you use a Lifetime ISA twice?
Yes, but not for the same thing. You can use your Lifetime ISA once to buy your first home, and then again later in life to fund your retirement. After using your Lifetime ISA to buy an eligible property, you can keep saving up to £4,000 per tax year (until you’re 50) and still earn the 25% government bonus each year.
Once you reach age 60, you can withdraw all your savings — including any new bonuses and interest or investment growth — tax-free and without penalty.
What you can’t do is use your Lifetime ISA to buy another property later on. The government bonus is only available once for a first home purchase. Any later withdrawals before age 60 that aren’t for retirement or a terminal illness will incur the 25% withdrawal charge.
Can you use a Lifetime ISA for a buy-to-let?
No, Lifetime ISAs are only for owner-occupiers, not investment properties.
To use your LISA bonus, the property must:
- Be your first home
- Cost £450,000 or less
- Be in the UK
- Be purchased with a mortgage
- Be one you plan to live in
If you buy a property to rent out, you’ll lose the 25% government bonus and pay a withdrawal penalty on the amount you withdraw, which may leave you with less than you originally deposited.
Save with the market-leading Cash Lifetime ISA
Save up to £4,000 each tax year and get a free 25% bonus on top of your savings, up to £1,000. Plus, with the Tembo Cash Lifetime ISA, you'll earn 3.8% AER (variable) on your savings - that's hundreds more in interest towards your house fund vs saving with the closest competitor!
Can I open a Lifetime ISA if I already have an ISA?
Yes, you can open a Lifetime ISA even if you already have another type of ISA, such as a Cash ISA or a Stocks & Shares ISA. You just need to stay within your overall £20,000 annual ISA allowance.
Find out more: When does the ISA allowance reset?
Can I put £20,000 in an ISA and £4,000 in a LISA?
No, your Lifetime ISA is part of your overall £20,000 ISA allowance. So if you save £4,000 into a Lifetime ISA, the most you can pay into other ISA types within the same tax year is £16,000.
For example:
- You could put £4,000 into a Lifetime ISA (earning a £1,000 government bonus)
- And spread £16,000 across Cash ISAs, Stocks & Shares ISAs, or Innovative Finance ISAs
Together, that’s the full £20,000 annual ISA limit, plus your government bonus on top. Any interest, investment growth or bonuses earned don’t count towards your allowance, so your total balance can grow beyond £20,000 without losing its tax-free status.
What if you’re buying with someone who isn’t a first-time buyer?
If you’re buying a house with someone who already owns their home or has owned property in the past, they won’t be able to use the Lifetime ISA on your joint purchase, but you can use yours.
If your partner is aged 18 to 39, they can still open and contribute to a Lifetime ISA — but they’ll only be able to withdraw their savings penalty-free when they turn 60.
Learn more:The essential guide to buying with a second-time buyer
When considering opening a LISA, remember that withdrawals for any purpose other than buying a first home or for retirement will incur a 25% government penalty, meaning you may get back less than you paid in.
