Q My partner and I are first-time buyers and we each have a lifetime Isa (Lisa). We are considering putting our savings together to buy a house in my partner’s name with the intention of eventually keeping it as a rental property and then buying another property later on in my name.
Will I still be able to enjoy my first-time buyer status and Lisa advantage (we won’t be using my own Lisa towards the first property) when we want to buy the other property in my name? And are we going to be allowed to rent out the first property considering we will be buying with a Lisa?
A The Lisa rules are very clear: “you must be buying a home you plan to live in. The scheme isn’t for buying a home you want to rent out (or a holiday home)“. So the answer to your second question is no. The rules also make it clear that you don’t get the Lisa advantage if the property costs more than £450,000.
The answer to your first question is less clear cut. If you are buying the first property jointly with a joint mortgage, you won’t still be a first-time buyer when you come to buy the second property.
But if the first property genuinely is owned solely by your partner – with the mortgage in his or her sole name – then your first-time buyer status is preserved when you come to buy your property. And assuming you buy it on your own, as well as the bonus from your Lisa, you’ll qualify for the first-time buyer stamp duty land tax (SDLT) relief for properties costing less than £500,000. This means that first-time buyers pay no SDLT on the first £300,000 of the cost of a property and 5% on the amount over £300,000 but below £500,000. Joint purchasers qualify for the relief only if they are both (or all) first-time buyers.