First Home Super Saver Scheme — Super and First Home Buyers

The First Home Super Saver Scheme (FHSS) allows eligible first home buyers to make voluntary contributions to their super fund and then withdraw those contributions (plus associated earnings) to help fund a property purchase. Because contributions are made at the concessional super tax rate, FHSS can generate a larger deposit faster than saving in a regular bank account.

How the FHSS Works in Brief

1. Contribute voluntarily — salary sacrifice or personal contributions, up to $15,000/year and $50,000 lifetime per person
2. Contributions sit in your super — invested in your regular super account, earning at the deemed rate (90-day bank bill rate + 3%)
3. Apply for an FHSS determination from the ATO via myGov when you’re ready to buy
4. Sign a contract within 14 days of the determination
5. Request release — the ATO instructs your fund to transfer the funds; you receive the net amount after tax withholding
6. Include in tax return — the concessional component is assessed as income less a 30% tax offset

The FHSS Tax Advantage

Saving for a home deposit inside super is more tax-efficient than a savings account for most earners:

At withdrawal, concessional FHSS amounts are taxed at marginal rate less a 30% tax offset — meaning a 32.5% earner pays effectively ~2.5% tax on the withdrawn amount.

Key FHSS Numbers (FY2025–26)

FHSS Guides

Understanding the Scheme

• First Home Super Saver Scheme (FHSS) Explained — Full guide: how the scheme works, eligibility, the $50,000 cap, how to apply, and the tax treatment
• FHSS Eligibility — Who Can Use the Scheme? — Age, first home, residency, and property requirements explained
• FHSS Annual Limit — How Much Can You Contribute? — The $15,000 annual and $50,000 lifetime limits, what counts, and how carry-forward doesn’t work
• FHSS Tax Treatment — How FHSS is taxed at every stage: contributions, inside super, and at withdrawal

Planning and Strategy

• FHSS Contribution Strategy — When to start, salary sacrifice vs personal deductible, coordinating with the concessional cap, and couples strategy
• FHSS Calculator Australia — Estimate your FHSS release amount and tax saving vs saving outside super

Application and Process

• How to Apply for the FHSS Scheme — Step-by-step: making contributions, getting a determination, applying for release, timing your settlement

Comparison and Context

• FHSS vs First Home Owner Grant (FHOG) — How both schemes work, the differences, and how to use them together
• FHSS vs Help to Buy — Comparing FHSS with the Help to Buy shared equity scheme, and which suits which situation
• FHSS vs High-Interest Savings Account — When FHSS beats a savings account — and when it might not

Common Problems

• FHSS Mistakes to Avoid — The timing and eligibility errors that can cost you money or disqualify your release
• FHSS FAQ — Answers to the most common questions about the scheme

Is FHSS Right for You?

FHSS is most effective if you:

• Are earning $45,001+ (at least 32.5% marginal rate — where the tax saving is meaningful)
• Have at least 1–4 years before you plan to buy
• Can afford to lock savings into super temporarily (they can’t be accessed for any other purpose until preservation age if you don’t buy)
• Are buying with a partner who also qualifies — doubling the benefit

FHSS may be less suitable if you:

• Need to access your deposit funds flexibly before you commit to a purchase
• Are planning to buy within a few months (not enough time to contribute meaningfully)
• Are a very low income earner (the tax saving vs savings account is smaller at 19% marginal rate)
• Already own, or have owned, Australian property

FHSS vs Other First Home Schemes — How It Compares

The FHSS is one of several government schemes available to first home buyers in Australia. Here is how it sits alongside the others:

The FHSS can be combined with most other first home buyer schemes — for example, using FHSS for the deposit component while also accessing the First Home Guarantee to buy with a 5% deposit total (5% from FHSS + government guarantee for remaining 15%).

Who Should Consider the FHSS?

The FHSS makes the most sense if:

• You are in the 32.5%, 37%, or 45% marginal tax bracket — the higher your tax rate, the more you save
• You have at least 2–3 years before you intend to buy (to accumulate meaningful contributions and generate deemed earnings)
• You are making voluntary contributions in addition to your employer’s SG contributions (the scheme only applies to voluntary amounts)
• You are eligible — must be an Australian resident for tax purposes and never previously owned property in Australia

At lower income levels (below $45,000), the FHSS tax advantage is smaller and the administrative complexity may not justify the savings.

The Process — Step by Step

1. Make voluntary contributions: Either salary sacrifice into super (pre-tax) or personal contributions (after-tax, for which you claim a tax deduction). Both types count toward FHSS.

2. Track your eligible amounts: The ATO tracks contributions on your behalf. You can check your estimated FHSS amount via myGov → ATO → Super → First Home Super Saver.

3. Request a determination: When ready to buy (or start searching seriously), apply to the ATO via myGov for an FHSS determination. This tells you the maximum releasable amount.

4. Sign a contract: You must sign a property purchase contract within 14 days of the determination or notify the ATO of your intent to proceed.

5. Request release: The ATO directs your super fund to release the eligible amount. Processing takes approximately 25 business days.

6. Declare in tax return: The FHSS amount is included in your assessable income in the year received, less a 30% tax offset. Your fund withholds a portion at the time of payment.

What Happens If You Can’t Buy?

If you receive an FHSS determination but are unable to buy (e.g., the property falls through or you withdraw from the market), you must recontribute the released amount to super or pay 20% tax plus the Medicare levy on the full amount. This penalty tax discourages people from using FHSS purely as a tax minimisation strategy rather than genuine saving for a home.

Frequently Asked Questions

Can couples both use the FHSS scheme?

Yes — each individual can access up to $50,000 in FHSS amounts. For a couple both using the scheme, up to $100,000 combined can be released as a deposit — plus associated deemed earnings. Both must separately have not previously owned property in Australia and both must lodge individual FHSS applications with the ATO.

Is the FHSS worth it for small amounts?

The FHSS may not be worth pursuing if you are only contributing $5,000–$10,000 — the administrative steps (determination, release request, tax return adjustment) add complexity. At $30,000+ of contributions, the tax saving and compounding within super becomes significant. ASIC’s MoneySmart FHSS calculator can help model your specific situation.

Can I use FHSS for an investment property?

No — the property must be your principal place of residence for at least six months within the first 12 months of ownership. It cannot be used for an investment property you do not intend to live in.

For advice tailored to your first home buying situation, speak with a licensed financial adviser through MoneySmart.