First Home Super Saver Scheme guide
Saving for a home deposit can be tough, but the First Home Super Saver Scheme (FHSSS) is designed to give first home buyers a valuable head start. By using your superannuation account, the FHSSS allows you to grow your savings faster thanks to tax benefits and potential investment earnings inside super.
What is the First Home Super Saver Scheme?
The FHSSS allows eligible first home buyers to withdraw voluntary contributions made to their super fund, along with associated earnings, to use towards a home deposit. These voluntary contributions are separate from the Super Guarantee payments your employer makes. Instead, they include contributions you make from your after-tax savings or through salary sacrifice.
Under the scheme, you can withdraw up to $15,000 from any one financial year, with a maximum of $50,000 across all years for contributions made from 1 July 2017. This amount is boosted by associated earnings, which the Australian Tax Office (ATO) applies at a set rate that is often higher than standard bank savings rates.
Who can use the FHSSS?
Eligibility is straightforward but important to meet. You must be at least 18 years old when you apply to release funds and you cannot have previously owned property in Australia, unless you lost it due to financial hardship. You also cannot have made a previous FHSSS release request.
Additionally, the property you buy must be residential and located in Australia. Once purchased, you need to move into the property and live there for at least six months within the first year after it is ready to occupy.
Why save for a deposit through FHSSS?
The key advantage of the FHSSS is the way your contributions are taxed. Voluntary contributions such as salary sacrifice are generally taxed at 15%, which is likely to be lower than your marginal income tax rate. This means more of your money goes towards building your deposit.
On top of that, the ATO applies a set earnings rate to your contributions, which can provide a return that is usually higher than what you would earn in a regular savings account. For instance, a one-off voluntary contribution of $10,000 could grow to $11,000 over two years thanks to these applied earnings.
Making voluntary contributions
Getting started with the FHSSS involves making voluntary contributions to your superannuation account. This can be done through salary sacrifice with your employer or by making personal contributions from your after-tax income.
For the 2025 financial year, the concessional contributions cap is $30,000 per year, while the non-concessional contributions cap is $120,000 per year. Staying within these limits is essential to avoid additional tax.
How to access your FHSSS savings
When you are ready to purchase a property, you must apply to the ATO for an FHSSS determination. This will confirm the maximum amount you can withdraw. Once approved, you submit a release request, and the ATO instructs your super fund to release the money. The funds are then sent to the ATO, which deducts any applicable tax before paying the balance to you.
It is worth noting that the taxable portion of your withdrawal is added to your assessable income in the year you make the request. However, a 30% tax offset applies, which helps reduce the overall amount of tax payable.
Important conditions to keep in mind
There are strict conditions around how and when you use FHSSS funds. You must sign a contract to purchase or build a home within 12 months of withdrawing your savings, though an additional 12-month extension may be granted. If you do not buy or build within the timeframe, you can either recontribute the funds back into your super account as a non-concessional contribution or keep the funds and pay an FHSSS tax of 20%.
Final thoughts
The First Home Super Saver Scheme is a smart way for first home buyers to fast-track their deposit using the tax advantages of superannuation. By understanding the rules and planning your contributions carefully, you could reach your savings goal sooner and move closer to owning your first home. Talk to our team at Buyvest to see how the First Home Super Saver Scheme could help you build your deposit faster.
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Turn your super into your first home deposit.
With the First Home Super Saver Scheme, your savings could grow faster than you think.
Important stuff:
Please note that the views and opinions expressed in this post are general information only, and this is not financial advice.
Any advice and information is provided by Buyvest Pty Ltd ABN 91 684 841 496, Australia Credit Licence No. 567392 and is general in nature, for educational purposes only and is not intended to constitute specialist or personal advice. This website has been prepared without considering your objectives, financial situation or needs. Therefore, consider the appropriateness of the advice for your situation and needs before taking any action. It should not be relied upon to enter into any legal or financial commitments. Specific investment advice should be obtained from a suitably qualified professional before adopting any investment strategy. If any financial product has been mentioned, you should obtain and read a copy of the relevant Product Disclosure Statement and consider the information contained within that Statement concerning your circumstances before deciding whether to acquire the product. You can obtain a copy of the PDS by emailing hello@buyvest.com.au. If you want to change your financial circumstances, such as applying for a loan, all loan applications are subject to credit approval.
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