FHSS vs Help to Buy — Which First Home Buyer Scheme Is Right for You?

Australia has two major Commonwealth Government schemes to help first home buyers — the First Home Super Saver (FHSS) scheme and the proposed Help to Buy shared equity scheme. They work very differently and suit different circumstances.

What Is the FHSS Scheme?

The FHSS scheme allows first home buyers to save for a deposit inside superannuation. You make voluntary contributions (up to $15,000/year, $50,000 lifetime) and later withdraw them — plus associated earnings — to use as a deposit. The tax advantage of super means you accumulate a deposit more efficiently than a standard bank account.

Key facts:

• Up to $50,000 per person ($100,000 for couples)
• No income limit
• You need a full deposit and borrowing capacity yourself
• Available for any residential property (no price cap)
• You own 100% of the property

What Is Help to Buy?

Help to Buy is a shared equity scheme where the Commonwealth Government co-purchases a portion of your home alongside you — reducing the deposit and loan size you need.

Key facts (as proposed — check current status before relying on these details):

• Government contributes up to 40% for new builds, 30% for existing properties
• You need a minimum 2% deposit
• You take a home loan for the remaining (typically 60–68%) and own the property with the Government as a silent co-owner
• Income caps apply: $90,000 (singles), $120,000 (couples)
• Price caps apply (varies by city — approximately $800,000 in capital cities)
• You can buy back the Government’s share over time
• Places are limited (10,000 per year)

Note: Help to Buy was legislated in late 2024 and is being implemented from 2025. Confirm current details with the National Housing Finance and Investment Corporation (NHFIC) / Housing Australia.

Side-by-Side Comparison

Which Scheme Suits Which Situation?

FHSS is likely more suitable if:

• You earn above the Help to Buy income cap
• You want to buy a property above the price cap
• You have time to save (at least 1–4 years of contributions)
• You want full ownership from day one
• You earn a middle-to-high income and benefit most from super’s tax advantages

Help to Buy is likely more suitable if:

• You cannot save a full deposit even with FHSS
• You meet the income cap requirements
• You need to buy sooner and can’t wait years to accumulate super contributions
• You are comfortable with a shared equity arrangement

Can You Use Both Together?

Potentially — you could use FHSS contributions as part of your 2% deposit for Help to Buy. However, combining them adds complexity in timing and application. Seek advice if you are considering both.

Frequently Asked Questions

Is Help to Buy available now or is it still proposed? Help to Buy was legislated in late 2024 and implementation began in 2025. However, individual states and territories need to sign bilateral agreements for the scheme to operate in their jurisdiction. Confirm current availability and open applications with Housing Australia (housingaustralia.gov.au) before relying on this scheme for your purchase plans.

Does Help to Buy income test include investment income? Yes — the Help to Buy income test uses your total taxable income, including investment income, rental income, and assessable super benefits. The cap is $90,000 for singles and $120,000 for couples (combined). If your income fluctuates (e.g., bonus, rental property), check whether you’ll be within the threshold for the year you apply.

With Help to Buy, do I pay the Government rent for their share of the property? No — there is no rent paid to the Government for their equity share. You own the property and live in it; the Government is a silent equity partner. You do not make periodic equity repayments unless you choose to buy back the Government’s share. When you sell, the Government receives its proportionate share of the sale proceeds.

Can I use FHSS to fund the 2% deposit required for Help to Buy? Potentially. If you have made FHSS contributions, you could use the released amount as your 2% deposit. However, timing is complex — you need the FHSS funds available before you apply for Help to Buy, and the lender must accept FHSS funds as genuine savings. Check with your lender and a mortgage broker before assuming this will work smoothly.

If property prices rise significantly after I buy through Help to Buy, does the Government’s share increase? Yes — the Government’s equity share is a percentage of the property’s value. If the property grows in value, so does the dollar value of the Government’s share. For example, if the Government holds a 30% share in a $700,000 property ($210,000) and the property rises to $900,000, the Government’s share becomes $270,000. This means you need to buy back more in dollar terms to own the property outright.

What happens to Help to Buy if I want to refinance or renovate? Both actions are more complex with a shared equity arrangement. You would typically need Housing Australia’s approval before refinancing (since they are a co-owner). Major renovations that increase property value will increase the dollar value of the Government’s equity share. These complications are a genuine downside of shared equity vs full ownership — factor this into your decision.

For more: FHSS Eligibility, FHSS Contribution Strategy, FHSS vs FHOG, FHSS FAQ. For advice tailored to your situation, speak with a licensed financial adviser via MoneySmart.