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How to use your Lifetime ISA to buy your first home, a step-by-step guide

We hope you enjoy this article from our archives. As investment, pension and tax rules change a lot over time, the information in this post may not be current, but we hope you still find it interesting.

When the Lifetime ISA was introduced in 2017, it was intended to help people put money away for their first home or retirement. If you’ve been using a Lifetime ISA (LISA) to get you onto the property ladder, it could be helpful to know what steps you need to take now that your home purchase is in sight.

Lifetime ISA first-home basics

A Lifetime ISA (or LISA) allows anyone aged between 18 and 39 to contribute up to £4,000 per tax year, tax-free, and benefit from a government bonus of 25% (up to a maximum of £1,000). At Nutmeg, we offer a stocks and shares Lifetime ISA. 

Your Lifetime ISA can be used to buy a first home provided the home is in the UK and has a final sale price of £450,000 or less. Alternatively, you can leave the money in your LISA to help fund your retirement.  

Using your Lifetime ISA to buy a property

If you are ready to purchase your first home, you may want to consider switching your LISA pot to cash. Switching your Lifetime ISA pot to cash now could help ensure a prompt withdrawal process later. Once held in cash the value of your Lifetime ISA will no longer be subject to market movement.

If you use a Lifetime ISA to purchase a home, you’ll need to work with a licensed conveyancer – a person who deals with all legal matters, administration, finance and queries involved in the sale. Not sure where to begin?  Learn more about conveyancers at the Money Advice Service.

Once you’ve appointed a conveyancer, you’ll then be ready to take the steps to use your Lifetime ISA to buy a house.

How it works – in a nutshell

  • You and your conveyancer will each complete declaration forms (both an investor form and a conveyancer form) and email them to Nutmeg.
  • You will also need to send us a confirmation Nutmail from within your Nutmeg account confirming the name of your conveyancer company, this is the company we will send the money in your Lifetime ISA to.
  • After the above steps are completed, we’ll request the withdrawal.  From here, withdrawals usually take at least seven to 10 business days, but can take longer in certain circumstances, to be processed and sent to your conveyancer.
  • Your conveyancer will use the money towards the home purchase.


How it works – step-by-step

  • Tell your conveyancer that you have a Lifetime ISA at Nutmeg and that you’d like to withdraw from that investment and use it towards your home purchase.
  • Download and complete the Investor Declaration Form  and email it to us at lisadeclarations@nutmeg.com.
  • You will also need to provide your conveyancer with the same information (such as your Nutmeg account number and the amount you wish to withdraw) as they also need to email that information to us.
  • Send the link to the Conveyancer Declaration Form to your conveyancer and ask them to complete the details and email the form to us as lisadeclarations@nutmeg.com.
  • You will need to send us a Nutmail confirming the name of your conveyancer.
  • Once we have received and verified both declaration forms and your confirmation Nutmail, we will request the withdrawal.
  • We’ll process the withdrawal at the next twice weekly trade cycle  and send the money to your conveyancer’s bank account (not your own) once the trades have settled.  Once requested, withdrawals usually take at least seven to 10 business days, but can take longer in certain circumstances, and will then be sent to your conveyancer’s bank account.
  • We’ll send you a Nutmail message to confirm when your conveyancers will receive the funds.
  • Once the property purchase completes, your conveyancer is required to notify us within 10 business days.
  • If the purchase will not be completed for any reason (for example, if any of the parties withdraw), your conveyancer is required to return the amount withdrawn to Nutmeg, after which we’ll reinvest it for you and your Lifetime ISA will remain active. There’s more detail on delays to house purchases in our support article.

If you have any questions, our customer service team are here to help. If you’d like more information about the Nutmeg Lifetime ISA, read one of our blogs or speak to one of our financial advisers.


Risk warning  

As with all investing, your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest.

A Lifetime ISA may not be right for everyone:

  • You must be 18–39 years old to open one.
  • If you need to withdraw the money before you’re 60, and it’s not for the purchase of a first home up to £450,000, or a terminal illness, you’ll pay a 25% government penalty. So, you may get back less than you put in.
  • Compared to a pension, the Lifetime ISA is treated differently for tax purposes. You may be better off contributing to a pension.
  • If you choose to opt out of your workplace pension to pay into a Lifetime ISA, you may lose the benefits of the employer-matched contributions.

Tax rules may change in the future. If you are unsure if a Lifetime ISA is the right choice for you, please seek independent financial advice.