The much anticipated and highly assumed Chancellor's Spring Budget could usher in a significant change benefiting first-time homebuyers. Jeremy Hunt is reportedly considering reducing the penalty rate and raising the property limit for Lifetime ISAs (LISAs).
Consumer advocate Martin Lewis applauds the anticipated move as a significant victory for aspiring homeowners. LISAs cater to individuals aged 18 to 39, augmented by a 25% government top-up, intended for first home purchases or retirement savings.
Presently, withdrawing funds for a property exceeding £450,000 incurs a 25% penalty. However, with escalating property prices, many LISA holders find themselves constrained by this limit. Hunt's proposal entails slashing the penalty rate to 20% and elevating the property threshold to £500,000.
This adjustment would mitigate penalties for those purchasing homes valued at £500,000 or more, providing relief for savers. Martin Lewis, advocating for governmental action on the matter, sees this potential revision as a favourable outcome for first-time buyers, addressing the current punitive nature of accessing their savings when priced out of lower-cost properties.
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