- John Healey has announced the replacement of the Lifetime ISA with a new First Time Buyer ISA as part of his first Budget.
- Speaking on Wednesday, the Chancellor said: “I’m announcing that a new First Time Buyer ISA will replace the Lifetime ISA, and from today, I am dealing with the LISA penalty. So if the home you want costs more than the limit, you will get back at least what you put in.”
- According to the government, the First Time Buyer ISA will be introduced from April 2029 and keeps “the generosity of the Lifetime ISA, allowing contributions of up to £4,000 a year with a 25 per cent government bonus”
- It adds: “The bonus will be paid on the value of the account balance when funds are withdrawn for a qualifying first home purchase, up to the value of £450,000, so avoiding the need for any withdrawal charge. The new product will have no upper age restriction.”
- Meanwhile, those purchasing a house above the LISA limit of £450,000 will now pay a reduced withdrawal charge of 20 per cent, it has been announced.
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