Lifetime ISA and first-time buyer relief when only one of you qualifies

A Lifetime ISA is per person, and first-time buyer stamp duty relief is lost if either of you has owned before. Both can change what each of you puts in. This guide covers the rules as they stood on 3 October 2026, and what to agree between you so the split feels fair to both.

How does a Lifetime ISA work when you buy together?

A Lifetime ISA (LISA) is a savings account in one person’s name. There’s no joint version. If you both want the bonus, you each need your own. The GOV.UK rules are:

• Opening: you must be 18 or over but under 40 to open one, and live in the UK (with some exceptions for the armed forces and crown servants).
• Paying in: up to £4,000 a year, until you’re 50. It counts towards your £20,000 yearly ISA allowance.
• The bonus: the government adds 25% to what you pay in, up to £1,000 a year.
• Buying your first home: you can take the money out without a charge if you’re a first-time buyer, the home costs £450,000 or less, you buy at least 12 months after your first payment in, you’re buying with a mortgage, and a conveyancer or solicitor acts for you. Your LISA provider pays the money straight to them.
• Living there: HMRC’s guidance says the home must be your only or main home once you complete. It can’t be a buy-to-let.

So two people saving the maximum each get up to £1,000 a year each, £2,000 between you. GOV.UK confirms that if the person you’re buying with also has a Lifetime ISA, you can both use your savings and bonus on the same home, as long as you’re both first-time buyers and both meet the conditions.

Two timing points catch people out. First, the 12 months runs from your first payment in, so a partner who opens one late may not be able to use it in time. Second, your conveyancer has to ask for the money, and HMRC’s conveyancer guidance says the purchase must complete within 90 days of the money arriving, with extensions possible. If the purchase falls through, the money has to go back into the LISA. Any amount not returned is charged 25%.

If either of you also has a Help to Buy ISA, you can only use the government bonus from one of the two accounts.

Can I use my Lifetime ISA if my partner isn’t a first-time buyer?

Yes. This is the question most couples ask, and the answer is clearer than many people expect. HMRC’s technical guidance for conveyancers says a Lifetime ISA holder can buy jointly with others “whether or not they’re also first time purchasers”. Its notes for investors say the same: you can buy with people who may or may not be first-time buyers, or with someone who already owns the home.

What matters is that you meet the conditions: you’re a first-time buyer, you’ll live there, the price is within the limit and there’s a mortgage.

Your partner’s own Lifetime ISA is different. If they have owned a home before, they aren’t a first-time buyer, so they can’t use their LISA on this purchase without the 25% charge. They can keep it and take the money out without a charge from age 60.

What is the Lifetime ISA property price limit?

The limit is £450,000, and it applies to the price of the whole home, not to your share. HMRC’s notes for investors say the maximum applies whether it’s a sole or joint purchase. For shared ownership, HMRC’s guidance says it applies to the full price of the home, not the share you buy.

That matters for couples. Buying a £480,000 home together means neither of you can use a Lifetime ISA on it without the 25% charge, even if your own share is well under £450,000.

The 25% charge takes back more than the bonus. GOV.UK’s example: £800 saved plus a £200 bonus makes £1,000, and a 25% charge on £1,000 is £250, leaving £750. On a bigger pot, £8,000 saved plus a £2,000 bonus becomes £7,500 after the charge, £500 less than you put in.

The two first-time buyer reliefs have different rules, so it helps to see them side by side.

Topic	Lifetime ISA	First-time buyer stamp duty relief (England)
Who must be a first-time buyer	The person using the LISA	Every buyer
Price limit	£450,000 for the whole home	£500,000
What you get	25% bonus, up to £1,000 a year each	No tax up to £300,000, 5% from £300,001 to £500,000
If one of you has owned before	The first-time buyer can still use theirs	Lost for both of you
Wales	Works the same way	Land Transaction Tax has no first-time buyer relief

What happens to first-time buyer stamp duty relief if one of you has owned before?

In England, you lose it. GOV.UK says you’re eligible for first-time buyers’ relief only “if you and anyone else you’re buying with are first-time buyers”. The law behind it means a first-time buyer has never owned a home, or a share of one, anywhere in the world. A flat one of you bought with an ex years ago counts, even if it was sold long ago.

Here’s what that means on a £300,000 home, using the rates in our stamp duty calculator for buying together (GOV.UK rates from 1 April 2025).

Stamp Duty Land Tax on a £300,000 home in England

Your situation	Stamp duty
You're both first-time buyers	£0
One of you owned a home before, but neither of you will own another home after you buy	£5,000
One of you will still own another home worth £40,000 or more at the end of the day you buy	£20,000

How the middle row works: the standard rates are 0% on the first £125,000, then 2% on the next £125,000 (£2,500), then 5% on the last £50,000 (£2,500), so £5,000 in total. The last row uses the higher rates, which add 5 percentage points to every band. GOV.UK says that if any buyer has to pay the higher rates, they apply to the whole purchase. In practice, the higher rates usually apply to the whole purchase if either of you will own another home after you buy and isn’t replacing your main home. Rules have exceptions, so check your own situation in the calculator and ask your conveyancer to confirm.

In Wales you pay Land Transaction Tax instead. It has no first-time buyer relief, so one partner’s past home doesn’t change the bill. The same joint rule applies to the higher rates: they apply to the whole purchase if either of you will own another home after you buy and isn’t replacing your main home.

How does this change what each of you puts in?

The rules above can move thousands of pounds between you, through no choice either of you made today. A worked example shows how.

Alex and Jordan buy a £300,000 home in England. Alex puts in a £40,000 deposit, partly from a flat Alex sold before they met. Jordan puts in £10,000 from a Lifetime ISA: £8,000 saved plus a £2,000 bonus. They have a £250,000 joint mortgage. Because Alex owned a home before, they pay £5,000 stamp duty instead of £0, and Alex pays it.

A few years later they sell. Assume the home sells for £330,000 with £230,000 of the mortgage left, so £100,000 is left over. In rows 2 to 4 they agreed that what each put in comes back first and the rest is shared equally. What changes is what counts as each person’s money.

Alex and Jordan's £100,000 after selling, depending on what counts as each person's money

What they agreed	Alex gets	Jordan gets
Nothing written down, equal shares	£50,000	£50,000
Deposits back first, and the LISA bonus counts as Jordan's	£65,000	£35,000
Deposits back first, but the bonus counts as shared	£66,000	£34,000
As row 2, and Alex's £5,000 stamp duty counts as Alex's money in	£67,500	£32,500

How the rows work:

• Row 2: Alex gets £40,000 back and Jordan £10,000. The remaining £50,000 is split equally, £25,000 each.
• Row 3: Alex gets £40,000 back and Jordan the £8,000 they saved. The £2,000 bonus stays in the pot, so £52,000 is split equally, £26,000 each.
• Row 4: Alex gets £45,000 back and Jordan £10,000. The remaining £45,000 is split equally, £22,500 each.

None of these is the right answer. Each is a fair choice that some couples make, and the gap between them is a few thousand pounds. The point is to choose together, before you buy, instead of finding out later that you each assumed something different.

Illustration only: these ignore selling costs, tax and who paid what towards the mortgage. Try your own numbers in the deposit split calculator. Put in whatever you agree counts as each person’s deposit.

What should you agree about the bonus and the stamp duty?

Three questions are worth settling, in writing, before your conveyancer asks how you’ll own the home.

1. Does the Lifetime ISA bonus count as the saver’s money? Arguments for yes: the saver chose to lock the money away and would have lost 25% if plans changed. Arguments for shared: the bonus only exists because you’re buying this home together. Both are reasonable.

2. Who pays the extra stamp duty? If one partner’s past home costs you the relief, some couples split the bill equally, because it’s a cost of the home you’re buying together. Others ask the partner whose history caused it to pay, or to count it as part of their deposit. On a £300,000 home that’s £5,000, so it’s worth a conversation.

3. What if one of you can’t use your LISA? If one partner’s Lifetime ISA has to stay put because they’ve owned before, or because the home costs more than £450,000, they may have less cash for the deposit. Agree whether that changes what each of you puts in, or how you share the mortgage.

Once you’ve agreed, record it in three places:

• How you own the home. If what each of you put in should come back first, you’ll usually need to own as tenants in common, not joint tenants. Our guide to joint tenants or tenants in common explains the difference.
• A declaration of trust. A signed document that sets out your shares or a formula such as deposits back first. Your conveyancer can prepare it when you buy.
• A couples agreement. A written couples agreement (also called a cohabitation agreement or a house buying agreement) can cover what a declaration of trust usually doesn’t, such as whose the bonus is, who paid the stamp duty and how you share the mortgage. Courts can take an agreement like this into account. Advicenow says courts will usually follow one if it’s fair and you were both open about your money, and are even more likely to follow it if you each had independent legal advice, separately. See how your agreement counts.

Is the Lifetime ISA being replaced?

Not yet. On 23 June 2026, HM Treasury published a consultation on a new First Time Buyer ISA, which “will be offered in place of the Lifetime ISA” once it’s available. The consultation closed on 18 August 2026.

What the consultation says, as of 3 October 2026:

• Until the new account is available, you can still open a Lifetime ISA, and existing holders can keep saving into theirs under the current rules.
• The proposals include no upper age limit for opening, no withdrawal charge, and a bonus paid when you withdraw to buy your first home.
• The yearly limit, bonus level and price cap are to be announced later.
• Existing Lifetime ISA holders would be able to use both their LISA and a new account for the same purchase, and couples could still combine their accounts.

The consultation gives no launch date, only that the government wants the new account available as soon as practically possible, and no date had been confirmed on GOV.UK when we checked. Until a change is confirmed, the Lifetime ISA rules in this guide apply. We’ll update this page when that changes.

What should you do next?

1. Check you each qualify. Ask yourselves whether either of you has ever owned a home or a share of one, anywhere. If you’re unsure, ask your conveyancer early.
2. Check the dates. Each Lifetime ISA needs its first payment at least 12 months before you buy. Make sure the home is £450,000 or less if you plan to use one.
3. Work out the stamp duty. Use the stamp duty calculator for buying together for your price and your situation.
4. Agree what counts as each person’s money. The bonus, the stamp duty and any family help. The deposit split calculator shows how each choice changes the split.
5. Talk it through together. Start free, together: the free 10-minute conversation asks what each of you is putting in, including family money, and whether the extra should come back first. Your answers stay on your device.
6. Tell your conveyancer. Say you’re using a Lifetime ISA, whether you’re buying as joint tenants or tenants in common, and ask about a declaration of trust.
7. Get advice if it’s complicated, for example if one of you will still own another home, a parent is buying with you, or either of you feels under pressure to agree.

General information, not legal or financial advice. For more on deposits, read what to do when one of you pays a bigger deposit and gifted deposits from family.