Can you use two Lifetime ISAs to buy a house?

If you’re trying to save for a house deposit for your first home, a Lifetime ISA may be a suitable option to consider. You can currently save up to £4,000 each tax year, and the government will top it up with a 25% bonus, meaning you could receive up to £1,000 per tax year completely free to put towards your first property.

With such a generous incentive, it’s no surprise that many first-time buyers wonder whether they can maximise the benefit even further by using more than one Lifetime ISA. 

So, can you use two Lifetime ISAs to buy a house, and is it really a legitimate strategy for speeding up your savings? Here’s everything you need to know about the rules around a Lifetime ISA.

Can you have more than one Lifetime ISA?

While you can have more than one Lifetime ISA open at the same time (for example, if you've not completed the transfer from an old provider, or you have an old LISA you haven't closed), you can only pay into one Lifetime ISA in any single tax year.

If you do wish to transfer your LISA, make sure you use the official Lifetime ISA transfer process. This ensures the money is transferred without counting as a new contribution, so you don’t use up your annual £4,000 Lifetime ISA allowance.

Can you use two Lifetime ISAs for one house purchase?

This is where the rules get a little more specific.

If you’re buying on your own:

Even if you hold more than one Lifetime ISA, you can only use one Lifetime ISA account when buying a home on your own. Any other LISAs you have cannot be used for that property. 

If you’re buying with a partner:

If both you and your partner are first-time buyers and each of you has a Lifetime ISA, you can both use your own LISAs toward the same property. This allows you to combine the government bonuses, which gives you a helpful boost to your total deposit.

Buying with someone who isn’t a first-time buyer

This is a very common situation. If you’re a first-time buyer but your partner isn’t, here’s how it works:

• You can still use your Lifetime ISA
• They cannot use their LISA on the same home, because they’ve already owned property
• You will still need to meet all the usual LISA criteria (property price, mortgage type, etc.)

The fact that your partner isn’t a first-time buyer doesn’t stop you from using your LISA, but it does mean that only your LISA can be used toward the purchase.

If your partner already has a LISA, their savings aren’t lost. They can keep contributing until they turn 50, still get the government bonus, and take the money out tax-free at 60.

Can a couple use a LISA and a Help to Buy ISA?

Yes, it is possible for a couple to use both a Lifetime ISA and a Help to Buy ISA toward the same property, as long as both names are on the mortgage, but there are some important rules to keep in mind.

Each person can only use one government-backed bonus per scheme. For example:

• One partner could use their LISA toward the deposit.
• The other partner could use their Help to Buy ISA.

However, the same person can’t use both schemes; a single individual cannot claim a LISA bonus and a Help to Buy bonus for the same property.

Additionally, both schemes have different maximum bonus limits and eligibility rules:

• The LISA provides a 25% bonus on up to £4,000 per tax year, capped at £1,000 per person annually.
• The Help to Buy ISA gives a 25% bonus on savings up to £12,000, with a maximum bonus of £3,000.

Combining the schemes across two people means that couples can increase the total government contribution toward their first home, making it a useful strategy for increasing the deposit.

What are the different types of ISAs?

Knowing the different types of ISAs may make things a little clearer:

• Cash ISA: A savings account where your interest is tax-free.
• Stocks and Shares ISA: Lets you invest in the stock market, with any potential growth or returns being tax-free.
• Lifetime ISA (LISA): Designed for first-time homebuyers and later life savings. You can save up to £4,000 per tax year and receive a 25% government bonus.
• Help to Buy ISA: A government savings scheme for first-time buyers that offered a 25% bonus (up to £3,000), but it closed to new savers in November 2019 and was replaced by the Lifetime ISA.

Each ISA type has its own purpose, limits, and features. Currently, Lifetime ISAs are the only option available to new savers that offer a government bonus for first-time home buying.

Points to remember

• You can only open and contribute to one Lifetime ISA (LISA) per tax year.
• You can transfer your existing LISA to another provider using the official transfer process, without impacting your government bonus or eligibility.
• You can hold a Cash ISA or Stocks and Shares ISA alongside a LISA.
• When buying alone, you can only use one LISA for your purchase. If you have a second LISA, you can't use it for the same property without facing withdrawal charges.
• Couples who are both first-time buyers can each use their LISA to buy a home together.

Start your home-buying journey with confidence

Lifetime ISA rules may feel confusing, especially when you're trying to plan for something as important as a first home. If you’d like to speak to one of our expert, friendly team members, we’re always here to help. Contact us on 0161 214 4650. While we can’t advise whether a Lifetime ISA is right for you, we’re happy to provide clear, factual information and explain how the product works.