How withdrawing your lifetime ISA to buy your first home works

Found the first place to call your own? Congratulations! Here’s how you withdraw your Dodl lifetime ISA to help you buy it.

Authored on
24 Nov 2022
How Dodl works
Read time
  5 minute read

Exciting times ahead! 🏡  

But first things first: before you withdraw, it’s important to check you qualify as a first-time buyer, and you’re able to use your lifetime ISA savings (charge-free) for the home you’re planning to buy. 


🔔 Important first check: can you withdraw your lifetime ISA?

Who qualifies as a first-time buyer? 

✅ You don’t own and have never owned a home, in the UK or abroad 

✅ You’ve never inherited a home (anywhere in the world) 

✅ You’re buying your first home to live in as your main residence i.e. not to rent it out 

What house can you buy using your lifetime ISA savings? 

The house you’re buying needs to: 

☕ be in the UK (you can’t buy a property abroad) AND 

💰 cost no more than £450,000 AND 

1️⃣ be just the one property (you can’t buy more than one place with your lifetime ISA) AND 

📜 be bought with the help of a mortgage 

Just one more thing: the 12-month rule  📅

You’ll need to have paid into your lifetime ISA for at least 12 months before you can withdraw it to buy your first home.  

Dodl doesn’t set these rules – the government does, and when you withdraw your lifetime ISA to buy your first home, we have to make sure your particular situation meets them. Otherwise the government’s 25% withdrawal charge will apply, and you may get back less than you originally saved.  

For more info on who qualifies as a first-time buyer and what qualifies as a first home, check out the government’s lifetime ISA campaign page. And, if you're in need of general first-time buying guidance then moneyhelper can help you here too.

All good? Then let’s get to it! 💃  

Here we break down the Dodl lifetime ISA withdrawal process into four easy steps

Step 1) Contact Team Dodl 📲 
Important!! do not withdraw your lifetime ISA through the app when buying your first home. Withdrawing that way will incur the 25% government withdrawal charge, and we don’t want that! 

Get in touch via the in-app chat or at 

Let the team know you’re planning to withdraw your lifetime ISA to buy your first home (yay!). The team will then email you a ‘lifetime ISA pack’ with all the info you’ll need to do this. The pack includes info on the declarations which you and your solicitor (or conveyancer – whoever’s helping you with the legal side of your purchase) will need to complete and return to us, to confirm you meet the lifetime ISA requirements. 

Selling your investments 💸 

At this point it’s worth thinking about when you want to sell your lifetime ISA investments (if you haven’t already). You’ll need to do this before your money can be withdrawn from your lifetime ISA, and it’s worth considering the time it takes for cash from the sale of your investments to arrive in your account (up to 3 working days after your sale completes). Just something to factor into your timings! 

Step 2) Complete & return the declarations 📑 

Once you’ve completed your declaration, it’s time to contact your solicitor/conveyancer to complete their side of things. They should know the drill, but remind them that once everything’s complete, they’ll need to send the docs (scanned PDF copies) to  - popping your name + ‘lifetime ISA withdrawal’ in the subject box. (A nice specific subject line helps the team immensely! 👌) 

Top tip: 🖍 If you need more details on what the declarations are, why you’re completing them and what your solicitor/conveyancer needs to do – check out this handy government page which covers pretty much all of it and includes declaration templates! 🙌  

Step 3) Dodl takes over from here 🤝 

Assuming a couple of important conditions are met:  

  1. you’ve sold your investments and your lifetime ISA is now sitting pretty as cash, ready to go (you’ll get a reminder to sell your investments if you haven’t by this stage) 

  1. you and your solicitor/conveyancer pass all of our lifetime ISA withdrawal checks – the info on your declarations helps us to complete these checks (thank you!) 

Your withdrawal will be processed by Dodl and – here’s the important bit – your lifetime ISA cash will be paid to your solicitor’s/conveyancer’s bank account. Because of this, Dodl always runs background checks on your solicitor/conveyancer – to make sure they are who they tell you they are, and your money’s being sent to safe hands. 🔒 

It can take up to 10 working days from the moment we’ve confirmed your declarations are all good to your payment arriving in your solicitor/conveyancer’s bank account, so make sure you factor this into your timings too.  

If you’re due another bonus payment after your withdrawal and you’ve not yet completed your purchase, once it’s been paid into your lifetime ISA you can request another withdrawal with another set of declarations. This’ll then be paid to your solicitor/conveyancer. If you’ve completed your purchase, you can still withdraw that bonus – but it’ll be paid to your bank account after the 25% withdrawal charge is taken. 

Step 4) Withdrawal complete ✅  

So that’s it. Over to you (and your solicitor/conveyancer) to complete the purchase of your first home! 🙌 

One thing just to bear in mind is that you’ll need to complete your house purchase within 90 days of your solicitor/conveyancer receiving your lifetime ISA withdrawal. If the deadline for this is getting close, ask your solicitor/conveyancer to contact us and we can give you an extension to complete, and we’ll let HMRC know too. 

Once you’ve completed it, it’s important to a) CELEBRATE! 🎇 And b) have your solicitor/conveyancer let us know you’ve completed within 10 working days of your completion date.  

Anything else?? 🤔

If anything seems even slightly unclear you always have Team Dodl on hand, ready to explain this process a little more, just chat to them in the app. 

Once you’ve bought your first home, you might not need your lifetime ISA anymore but you can still use it to save and invest for your retirement, or open another account with Dodl and start investing towards another life goal. ✨ 

🔔 As always, nothing in this article should be taken as advice - Dodl doesn't give advice, but we do hope the info is helpful!

It's important to know

You have to be a UK resident for tax purposes to open an account with Dodl.

The past performance of investments isn't an indicator of their future performance and their value can go down as well as up. This means you could get back less than you originally invested. 

Dodl doesn’t offer any advice so if you’re not sure about the risks involved with investing, you should speak to a suitable financial adviser. 

How you're taxed depends on your circumstances, and tax rules can change in future.

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