First Home Super Saver Scheme (FHSS) — Complete Guide 2026

The First Home Super Saver Scheme (FHSS) is a federal government program that allows eligible first home buyers to save for a home deposit inside their super fund, then withdraw those savings to use toward a purchase. Because contributions inside super are taxed at only 15% (rather than your marginal income tax rate), FHSS can result in a larger deposit than saving the same amount in a bank account or term deposit.

Key Takeaways

• FHSS lets first home buyers save inside super and withdraw up to $50,000 of voluntary contributions for a deposit
• Contributions inside super are taxed at 15% — often significantly less than your marginal income tax rate
• Only $15,000 of voluntary contributions per financial year count toward FHSS — you need at least 4 years to reach the maximum
• Apply for an ATO release determination before signing a purchase contract — you cannot release funds retrospectively
• Funds not used to purchase a home within 12–24 months are taxed heavily — FHSS is only suitable if you are committed to buying

How the FHSS Scheme Works — Overview

1. You make voluntary super contributions (concessional or non-concessional) specifically to save for a home deposit
2. These contributions are made within your existing super fund — there is no separate FHSS account
3. When you are ready to buy, you apply to the ATO to release up to $50,000 of your voluntary contributions (plus associated earnings)
4. The ATO calculates your release amount, withholds applicable tax, and sends the net amount to you
5. You use the funds toward your first home purchase within the required timeframe

Eligibility

To use the FHSS scheme, you must:

• Be aged 18 or over when you apply for a release determination
• Have never previously owned property in Australia (this includes investment properties — not just an owner-occupied home). There is a limited hardship exemption — contact the ATO if you believe you qualify
• Not have previously made an FHSS release request
• Intend to live in the property you are buying (not purchase as pure investment)
• Sign a contract to purchase or construct a home within 12 months of the release (extensible to 24 months with ATO approval)

The Contribution Cap — $50,000 Total

The maximum you can release under FHSS is $50,000 of eligible voluntary contributions (plus associated earnings — the earnings component can push the total release amount above $50,000).

Annual contribution limit: Up to $15,000 of voluntary contributions per financial year can be counted toward FHSS. This means you need at least 4 financial years to reach the $50,000 maximum.

Only voluntary contributions count — employer SG contributions do not count toward the FHSS cap.

What Contributions Count?

Concessional contributions (most common for FHSS):

• Salary sacrifice contributions you arrange with your employer
• Personal contributions for which you have lodged a valid Notice of Intent to Claim a Deduction (Section 290 notice) with your fund
• These are taxed at 15% inside the fund — saving you the difference between 15% and your marginal rate

Non-concessional contributions:

• Personal after-tax contributions where you do not claim a deduction
• No 15% contributions tax applies — the money is already after-tax
• Still count toward the FHSS $15,000 annual cap and $50,000 total cap

For most FHSS participants, concessional contributions are more tax-effective — the 15% tax inside super means more money accumulates than if it had been taxed at your marginal rate and saved in a bank account.

The Tax Advantage — Worked Example

Scenario: Single person earning $85,000/year. Marginal rate 32.5% + 2% Medicare = 34.5%.

Saving $15,000/year for 3 years:

Estimated advantage over 3 years: approximately $8,775 (plus the higher earnings from a larger initial retained amount).

Note: Tax on withdrawal from FHSS applies (see below) — the comparison is still favourable for most income levels.

How to Apply — Step by Step

Step 1 — Make voluntary contributions

Make salary sacrifice or personal contributions to your super fund. Keep records of which contributions you want to count toward FHSS.

Step 2 — Request a FHSS determination from the ATO

Before you sign a contract, apply to the ATO via myGov / ATO online services for an FHSS Determination. The ATO calculates:

• The eligible contributions you have made (up to $15,000/year, up to $50,000 total)
• The associated earnings — a calculated amount based on the shortfall interest charge rate (not your actual fund returns)
• The total maximum release amount

Step 3 — Request the release

Once you have a determination, and once you have signed a contract to purchase (or are ready to do so within 12 months), request the actual release through myGov.

Step 4 — ATO sends the net amount

The ATO contacts your super fund to release the funds:

• Withholds withholding tax (see below)
• Sends the after-tax amount directly to you (not to the fund — it’s paid to you)
• Issues you a FHSS payment summary

Step 5 — Buy your property

You must sign a contract within 12 months of your release date (or apply for a 24-month extension). If you don’t purchase within the timeframe, you must either recontribute the amount to super or pay an additional 20% tax on it.

Tax on FHSS Release Amounts

The FHSS release amount is subject to tax on withdrawal — but at concessional rates:

Concessional contributions + associated earnings:

• Included in your assessable income for the year you receive the release
• Taxed at your marginal rate
• But you receive a 30% tax offset on the assessable FHSS amount — reducing the effective rate significantly

Non-concessional contributions:

• Released tax-free (already after-tax money)

Example (continuing from above — $38,250 concessional after 3 years):

• Release amount included in income: $38,250 (approximately)
• Tax at 34.5% marginal rate: $13,196
• Less 30% offset: $38,250 × 30% = $11,475
• Net tax: $1,721
• Net received: ~$36,529

Even after the withdrawal tax, the FHSS participant is ahead of the regular savings scenario.

What FHSS Cannot Be Used For

• Purchasing land without a home to be built on it within a reasonable timeframe (land only purchases require care — check ATO guidance)
• Purchasing a property purely as an investment with no intention to live in it
• People who have previously owned property in Australia (with limited hardship exceptions)

Frequently Asked Questions

Can both members of a couple use FHSS? Yes — each eligible person can access up to $50,000 of their own contributions via FHSS. A couple can potentially access up to $100,000 combined (subject to each person meeting the eligibility criteria and having made sufficient contributions).

What if I change my mind and don’t want to buy a home? If you receive an FHSS release but do not purchase a home within the required timeframe, you have two options: (1) recontribute the released amount to your super fund as a non-concessional contribution within the deadline, or (2) pay an additional 20% tax on the received amount. This makes FHSS a relatively locked-in decision once the release is made.

Does FHSS count toward the concessional or non-concessional cap? Contributions made for FHSS purposes count toward the standard contribution caps:

• Concessional FHSS contributions count toward the $30,000 CC cap
• Non-concessional FHSS contributions count toward the $120,000 NCC cap

Can I use the FHSS to buy a home with my partner if only one of us is a first home buyer? Each person’s eligibility is assessed individually. If only one partner qualifies (the other has previously owned property), only the eligible partner can use FHSS for their portion.

For official FHSS rules, see the ATO’s FHSS information. Use our FHSS Calculator to estimate your release amount. For advice tailored to your situation, speak with a licensed financial adviser through MoneySmart.