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. This government initiative makes homeownership more achievable for those who need help building their property deposit.

Quick overview: the First Home Super Saver Scheme lets eligible first home buyers withdraw up to $50,000 from their superannuation to build their deposit, with tax advantages and potential earnings growth making it faster to save for your first home and enter the property market.

What is the First Home Super Saver Scheme?

FHSSS explained: understanding how the FHSSS works helps you unlock its key benefits and plan your first home purchase strategy effectively. 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.

The FHSSS lets you harness the power of superannuation tax concessions for home buying. Your contributions grow faster than in regular savings accounts, accelerating your path to homeownership.

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 arrangements. Under the scheme, you can deposit 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
• 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
• 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

Our mortgage broker advisers can help you understand first home buyer loan eligibility alongside FHSSS requirements to ensure you meet all scheme conditions.

Why save for a deposit through FHSSS?

Financial advantages: the tax advantages and earnings growth through FHSSS make it a smart strategy for building your deposit faster than traditional savings methods. Multiple financial benefits combine to make FHSSS an excellent tool for first home buyers.

FHSSS combines tax concessions with earnings growth. Lower contributions tax and higher investment returns mean your deposit grows significantly faster than in regular savings accounts, helping you purchase sooner.

Tax advantages on contributions

Lower tax rate:

• Voluntary contributions such as salary sacrifice are generally taxed at 15%
• This is likely to be lower than your marginal income tax rate
• More of your money goes towards building your deposit
• Compared to saving in a regular bank account

Earnings growth at set rates:

• The ATO applies a set earnings rate to your contributions
• This 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
• This compounding effect accelerates your path to homeownership

Understanding your Loan to Value Ratio (LVR) alongside your FHSSS savings helps you maximise your borrowing capacity when combined with your deposit. Our home equity calculator can show how your FHSSS savings integrate with your borrowing position.

Making voluntary contributions

Contribution planning: strategic contribution planning helps you maximise your FHSSS benefits whilst staying within annual contribution caps and tax requirements. 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.

Contribution strategy matters. Plan your salary sacrifice or personal contributions to maximise tax benefits whilst staying within annual caps to avoid additional tax penalties.

Understanding home finance planning and deposit options helps you determine how much to contribute strategically. For the 2025 financial year, the concessional contributions cap is $30,000 per year, whilst the non-concessional contributions cap is $120,000 per year. Staying within these limits is essential to avoid additional tax. If you're purchasing in areas like Ryde, Parramatta, or Baulkham Hills, our mortgage broker advisers can help you plan your contribution strategy based on local property values and market conditions.

Contribution types explained

• Salary sacrifice: contributions deducted from your pre-tax salary through your employer, taxed at 15%
• Personal contributions: made from your after-tax income, but provide tax deductions that can lower your overall tax liability
• Employer contributions: super guarantee contributions from your employer cannot be used in the FHSSS

How to access your FHSSS savings

Withdrawal process: understanding the withdrawal process ensures you can access your funds efficiently when you're ready to purchase your first home. 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.

The FHSSS withdrawal process is straightforward but has strict timelines. Plan your application to align with your home search and pre-approval to ensure funds are available when you need them.

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. Understanding your first home buyer loan options alongside this process helps you plan your purchase timeline.

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. Understanding your mortgage repayment capacity alongside your FHSSS withdrawal helps you determine your total borrowing power.

FHSSS withdrawal timeline

1. Apply to ATO for FHSSS determination
2. Receive ATO approval with maximum withdrawal amount
3. Submit release request to your super fund
4. Funds paid to ATO for tax processing
5. Balance transferred to your nominated account
6. Funds available to use for home purchase

Ready to explore your options?

Discover how the First Home Super Saver Scheme can help you build your deposit faster with tax advantages and guaranteed earnings growth.

Book consultation Call: 0426 002 202

Understanding FHSSS conditions

Important conditions: meeting FHSSS conditions ensures you use your withdrawn funds correctly and maintain your scheme eligibility. Key conditions include strict timeframes for property purchase and occupation requirements that all first home buyers must follow.

FHSSS has strict conditions about how and when you use the funds. Understanding these requirements helps you plan your purchase timeline and avoid penalties or recontribution obligations.

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 in some circumstances. The property must be your principal place of residence, and you must occupy it for at least six months within the first year after it is ready for occupation. These conditions ensure scheme funds support genuine homeownership, not investment purposes.

Frequently asked questions

Common questions: these FAQs address common questions about FHSSS eligibility, withdrawal timelines, and how it integrates with your home purchase journey. Our mortgage broker team regularly guides first home buyers through these important considerations.

What happens if I don't buy or build a home within the timeframe?

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%. Planning your pre-approval and home search timeline carefully helps you meet these requirements.

Can I use FHSSS for an investment property or rental?

No, the FHSSS is exclusively for purchasing or building a home as your principal place of residence. The property must be residential and located in Australia, and you must move into it within the required timeframe. It cannot be used for investment properties or rentals. If you're interested in investment strategies after purchasing your first home, our mortgage broker advisers can discuss those options separately.

How much can I deposit into my super under FHSSS?

You can deposit up to $15,000 per financial year, with a maximum of $50,000 across all years for contributions made from 1 July 2017 onwards. This maximum amount is boosted by associated earnings that the ATO calculates at a set rate. Understanding your property deposit calculator helps you determine if FHSSS alone will meet your needs or if combined with other savings, it gets you closer to your purchase goal.

What's the difference between concessional and non-concessional contributions?

Concessional contributions, like salary sacrifice, are taxed at 15% when contributed to super, which is typically lower than your marginal tax rate. Non-concessional contributions are made from after-tax income but have higher annual caps. For FHSSS purposes, both types of contributions are eligible for withdrawal. Consulting with a financial adviser helps you choose the contribution strategy that works best for your circumstances and maximises your FHSSS benefit.

Can I withdraw FHSSS funds if I'm purchasing with a partner?

Yes, if both you and your partner are eligible first home buyers, you can each withdraw up to the maximum $50,000 from your respective super accounts. This combined approach can significantly boost your joint deposit. Coordinating your first home buyer loan application with dual FHSSS withdrawals can strengthen your purchasing position.

What is the 30% tax offset mentioned in FHSSS?

When you withdraw FHSSS funds, the taxable portion is added to your assessable income in the year you make the request. However, the Australian Tax Office applies a 30% tax offset to reduce the overall tax payable on this income. This offset is designed to prevent double taxation on your contributions and earnings. Your tax position depends on your overall income, so discussing your situation with a tax professional ensures you understand your liability.

Can I make a salary sacrifice arrangement if my employer doesn't offer super?

Most employers are required by law to offer superannuation, but if yours doesn't or if you're self-employed, you can still make personal contributions from your after-tax income to the FHSSS. Self-employed individuals and those in non-traditional employment arrangements can contribute through their own super accounts. Our mortgage broker advisers can help you understand your options based on your employment situation and maximise your FHSSS contributions.

How does FHSSS coordinate with government first home buyer grants?

FHSSS withdrawals are separate from first home buyer grants and concessions available in most states. You can use FHSSS savings alongside state grants such as NSW First Home Owner Grants or stamp duty concessions to maximise your total available funds. When layering multiple schemes, exploring your first home owner grant eligibility ensures you capture all available benefits.

How does FHSSS compare to the Home Guarantee Scheme?

FHSSS and the Home Guarantee Scheme are complementary first home buyer programmes. FHSSS helps you build your deposit faster, whilst the Home Guarantee Scheme lets you purchase with a smaller deposit and no Lenders Mortgage Insurance. Many first home buyers use both schemes together to maximise their purchasing power.

What happens if I lose my job after withdrawing FHSSS funds?

If you lose your job before purchasing a property, you still have 12 months, plus potential extension, to complete your property purchase. If circumstances prevent you from completing the purchase within the timeframe, you can either recontribute the funds back into super or keep the funds and pay FHSSS tax of 20%. Our mortgage broker team can help you understand your options if your circumstances change.

Get expert guidance today

Our mortgage brokers can help you coordinate your FHSSS strategy with your home loan options to maximise your purchasing power and find the best first home buyer pathway across Gladesville, Penrith, and throughout NSW.

Book consultation Call: 0426 002 202

📧 Email: hello@buyvest.com.au

Related resources for first home buyers

Explore these related articles:

• Home Guarantee Scheme (5% deposit) – access First Home Guarantee and Family Guarantee schemes
• NSW First Home Owner Grant guide – understand how to access the $10,000 government grant
• Pathways to home ownership – navigate loans, grants, valuations, and budgeting with expert advice
• How to buy the right property as a first home buyer – pros and cons of houses, townhouses, apartments, and land
• Buying off the plan – risk and advantages – secure brand-new property and prepare financially

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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.

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