FHSS Scheme — Using Super for Your First Home Deposit (2026)
The First Home Super Saver (FHSS) scheme allows first home buyers to save for a deposit inside their superannuation fund and withdraw those savings — plus associated earnings — to use as a deposit.
Contributions made inside super are taxed at 15% rather than your marginal income tax rate. For someone earning $90,000 (marginal rate 34.5% including Medicare levy), the FHSS scheme creates an approximate 19.5% tax saving on every dollar contributed — a meaningful boost to your deposit savings.
Key Numbers at a Glance
| Feature | Detail |
|---|---|
| Maximum total withdrawal | $50,000 (from 1 July 2022) |
| Maximum voluntary contributions per year that count | $15,000 |
| Tax inside super | 15% on contributions and earnings |
| Tax on withdrawal | Marginal rate minus 30% tax offset |
| Eligible contribution types | Salary sacrifice (concessional); voluntary personal after-tax (non-concessional) |
| Must you own a home? | Must not have previously owned property in Australia (except in limited hardship circumstances) |
How the FHSS Scheme Works — Step by Step
- Make voluntary super contributions — either salary sacrifice through your employer or voluntary personal contributions (then claim a tax deduction)
- Contributions are taxed at 15% inside super (rather than your marginal rate)
- After saving enough, apply to the ATO for a FHSS determination to find out how much you can withdraw
- Request a release — the ATO instructs your fund to release the funds
- Use the funds for your deposit — you must sign a contract to purchase or build within 12 months of withdrawal (extendable to 24 months with ATO approval)
The ATO calculates your release amount as: eligible contributions + associated earnings (based on the shortfall interest charge rate — approximately 4–5% per year).
FHSS Tax Saving — Worked Example
Scenario: $90,000 salary, $30,000 total FHSS contributions over 3 years ($10,000/year)
| Without FHSS | With FHSS | |
|---|---|---|
| Tax on contributions | 34.5% marginal (inc. Medicare) | 15% inside super |
| Tax saving per $10,000 | — | ~$1,950 |
| Total tax saving on $30,000 | — | ~$5,850 |
| Tax on FHSS withdrawal | — | Marginal rate minus 30% offset |
At $90,000 income (marginal rate 34.5%), withdrawal tax = 34.5% − 30% = 4.5% on the withdrawable amount. The overall tax saving remains substantial.
For non-concessional (after-tax) contributions, there is no additional tax saving at entry — only earnings inside super are taxed at 15% instead of your marginal rate.
Who Benefits Most from the FHSS Scheme?
The FHSS scheme is most beneficial for:
- Taxpayers with a marginal rate above 34.5% (income over $45,001 including Medicare levy) — the tax saving between their rate and the 15% super rate is most significant
- Those with 2+ years before they expect to buy — the longer contributions compound inside super, the greater the benefit
- Those without existing large deposits — the FHSS is a supplementary strategy, not a replacement for other savings
The scheme is less beneficial for:
- Taxpayers on the 19% marginal rate (income $18,201–$45,000) — the tax gap to 15% is small
- Those buying within 12 months — limited time to make meaningful contributions
FHSS and Salary Sacrifice
The most common way to use FHSS is through salary sacrifice — arranging with your employer to redirect a portion of pre-tax salary into super. This reduces your taxable income and the contributions are taxed at 15% inside super.
Check the concessional contributions cap: Total concessional contributions (including employer SGC contributions) must not exceed $30,000/year (FY2025–26). Count your employer’s 12% SGC when calculating how much you can additionally salary sacrifice.
Example: If your employer contributes $9,000/year (12% SG on $75,000 salary), you can salary sacrifice up to $21,000/year and remain within the cap — of which $15,000/year counts toward the FHSS limit.
FHSS — Limitations and Risks
- Money is locked in super — if you don’t buy a home within the required timeframe, you will pay tax plus a 20% penalty on the withdrawal (or leave it in super until retirement)
- Super fund investment risk — contributions are invested in your chosen super investment option; returns are not guaranteed
- Administration complexity — requires careful tracking of eligible contributions and an ATO determination before you can access funds
- Must be first home — FHSS is not available to previous home owners (except in limited financial hardship circumstances)
Applying for FHSS — How to Get Your Money Out
- Request a FHSS determination from the ATO (via myGov) — this tells you how much you can withdraw
- Request a FHSS release from the ATO — you cannot request funds directly from your super fund
- The ATO issues a release authority to your super fund
- Your super fund releases funds to the ATO (within 10 business days)
- The ATO withholds tax and sends the net amount to you
- You must sign a contract to purchase or build within 12 months of the release date
FHSS and Other Schemes
FHSS can generally be combined with:
- First Home Guarantee (FHBG) — FHSS withdrawal forms part of your 5% deposit
- FHOG — FHSS withdrawal supplements your deposit; FHOG is paid by state government
- Stamp duty concessions — FHSS doesn’t affect stamp duty eligibility
Important: Read the full FHSS rules at the ATO website (ato.gov.au) and the superannuation-specific guide at Superannuation First Home Super Saver before making contributions.
Frequently Asked Questions
How much can I withdraw from the FHSS scheme? The maximum withdrawal is $50,000 in eligible contributions (up to $15,000 per financial year) plus associated earnings at the shortfall interest charge rate.
Can a couple both use the FHSS scheme? Yes. Each person can individually make FHSS contributions and withdraw up to $50,000. A couple could potentially combine up to $100,000 for a shared deposit.
What happens to my FHSS contributions if I don’t buy? If you withdraw but don’t buy within 12 months (or 24 months with extension), a 20% penalty tax applies to the withdrawn amount plus income tax. Alternatively, you can re-contribute the funds to super and forgo using the scheme.
Are FHSS withdrawals counted as income? Yes — FHSS withdrawals are included in your assessable income in the year of withdrawal, but taxed at your marginal rate minus a 30% tax offset.
Related Guides
- Saving for a Deposit in Australia
- How Much Deposit Do I Need?
- First Home Guarantee Explained
- First Home Buyer Hub
This article provides general information only about the FHSS scheme. Super fund investment returns are not guaranteed. Tax treatment of FHSS withdrawals depends on individual circumstances. For advice tailored to your situation, speak with a licensed financial adviser. Find one through MoneySmart.