First Home Super Saver scheme
By Ali Hasani, Founder and Principal Mortgage Broker at Buyvest, MFAA accredited. Last updated July 2026. Contribution caps are 2026-27 figures, verified against the ATO. This is general information, not tax advice.
It is genuinely useful, and it is also the scheme people most often get wrong, because the amount you get out is not the amount you put in. This guide covers how the numbers actually work, the timing traps, and how FHSS sits alongside the 5% Deposit Scheme and the NSW benefits.
The short version: You can contribute up to $15,000 in any one financial year and $50,000 across your lifetime. Those contributions sit inside your normal super caps, not on top of them. When you release, you get 85% of your before-tax contributions and 100% of your after-tax ones, plus deemed earnings set by the ATO. The released amount is taxed at your marginal rate less a 30% offset. Request your determination before you sign anything.
What is the First Home Super Saver scheme?
FHSS lets first home buyers make voluntary contributions into super, then release them for a deposit. The benefit comes from super's 15% contributions tax being lower than most people's marginal rate, plus deemed earnings the ATO applies on top.
Only voluntary contributions count. Your employer's Super Guarantee, currently 12%, is not eligible. Voluntary means either salary sacrifice arranged with your employer, or personal contributions you make from after-tax income and claim a deduction on.
Contributions made from 1 July 2017 onwards are eligible. The lifetime cap rose from $30,000 to $50,000 on 1 July 2022, so if you started earlier you may have more headroom than you think.
Who is eligible for FHSS?
You must be at least 18 when you request a release, must not have owned property in Australia before, and must not have made a previous FHSS release request. Eligibility is assessed per person, not per couple.
There is an exception to the ownership test where you lost property through financial hardship. The property you buy must be residential and in Australia, and you must intend to live in it.
Because eligibility is individual, two people buying together can each access their own $50,000. You do not need to be married or in a de facto relationship, so friends or siblings buying together can each use it. If one buyer has owned property before and is ineligible, the other can still use the scheme on their own contributions.
Lenders generally accept an FHSS release as genuine savings, which matters when you apply for pre-approval.
How much can you contribute and release?
You can contribute up to $15,000 in any single financial year, capped at $50,000 across your lifetime. Reaching the full $50,000 takes four financial years at the annual limit.
The point people miss is that FHSS contributions sit inside your existing super caps rather than beside them. For 2026-27 the concessional cap is $32,500, up from $30,000, and that cap already includes your employer's Super Guarantee. If your employer contributes $13,000 and you salary sacrifice $15,000, you have used $28,000 of your $32,500. Exceed the cap and the excess is not releasable under FHSS, and you may face additional tax.
The non-concessional cap for 2026-27 is $130,000, so after-tax contributions are rarely the constraint.
How does the tax benefit actually work?
Money goes in taxed at 15% instead of your marginal rate. When it comes out, only 85% of before-tax contributions are released, and the released amount is taxed at your marginal rate less a 30% offset. The benefit is real but smaller than the headline suggests.
Going in
A salary sacrifice contribution is taxed at 15% on the way into your fund. If your marginal rate is higher than that, and for most working people it is, more of your gross income ends up saved than if you had taken it as salary and banked it.
What gets released
The ATO releases 85% of your eligible before-tax contributions and 100% of your eligible after-tax contributions, plus associated earnings. That 85% is a release rule, not a refund of the contributions tax, and it is why your release is always smaller than the total you contributed through salary sacrifice.
Associated earnings
The ATO adds a deemed earnings amount rather than your fund's actual investment return. It is calculated using the shortfall interest charge rate, which is set quarterly and compounds daily, and has been running around 7.4% for 2026-27. Earnings accrue from the first day of the month each contribution was made. Because the rate is deemed, a poor year inside your fund does not reduce it, and a strong year does not increase it.
Coming out
The released amount, other than after-tax contributions, is added to your assessable income in the year you request it, and a 30% tax offset applies. In practice the ATO withholds 30% upfront and the position is reconciled through your tax return. So the cash that reaches your account is less than the determination figure.
Do not model this yourself. The outcome depends on your marginal rate, your contribution mix, and the quarterly earnings rates that applied while your money sat there. Request an FHSS determination through ATO online services via myGov and it will give you your actual maximum release amount. Then speak with your accountant about the tax position, because that part genuinely differs person to person.
How do you access your FHSS savings, and when?
Request an FHSS determination before you sign a contract, then submit a release request. Release takes several weeks, so the money needs to be organised well before you need it, not after.
The order matters
Request the determination first. It confirms your maximum release amount and is the step people most often leave too late. Once you have it, submit your release request and the ATO instructs your fund to release the money, deducts tax, and pays the balance to your bank account.
Allow weeks, not days
The release process takes several weeks and longer at busy times of year. This is the single most common practical problem with FHSS. Buyers assume the money can be summoned when they need it, and it cannot.
If you are bidding at auction, the funds need to be in your account before auction day. There is no cooling off period at auction and a 10% deposit is due on the fall of the hammer. An FHSS release that arrives three weeks later is no help at all. Start the process while you are still searching.
Tell the ATO within 28 days of signing
Once you sign a contract to buy or build, you have 28 days to notify the ATO. Missing that window risks penalties. Put a reminder in your phone the day you sign, because it is easy to lose in the noise of a purchase.
What are the conditions after release?
You have 12 months from release to sign a contract to buy or build, with a possible 12-month extension. You must live in the home for at least 6 of the first 12 months after it is ready to occupy.
If you do not buy or build in time, you have two options. Recontribute the funds into super as a non-concessional contribution, or keep the money and pay FHSS tax of 20% on the assessable released amount.
The clock runs from release, not from settlement, which matters for off the plan purchases where construction can take a year or more. Signing the contract is what stops the clock, so an off the plan purchase generally works, but the timing needs thinking through rather than assuming.
How does FHSS work with the other schemes?
FHSS builds the deposit. The other schemes reduce what you need or what you pay. They are complementary and can generally be used together.
The Australian Government 5% Deposit Scheme lets you buy with 5% and no LMI, and your FHSS release counts towards that deposit and towards genuine savings. The NSW stamp duty exemption removes duty on homes up to $800,000. The $10,000 First Home Owner Grant applies to new homes under $600,000, a lower cap than the duty threshold. Help to Buy is an alternative to the 5% scheme rather than an addition, since you cannot use both.
Rather than adding up a headline total, work out what each one is worth in your situation. Our deposit options guide compares the pathways, and the benefits and risks guide covers the trade-off in buying with a small deposit.
Coordinating FHSS with your finance?
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Frequently asked questions
How much can I withdraw under FHSS?
Up to $15,000 of contributions from any one financial year and $50,000 across your lifetime, for contributions made from 1 July 2017. What actually gets released is 85% of eligible before-tax contributions and 100% of eligible after-tax contributions, plus deemed earnings. Request an FHSS determination through ATO online services for your exact figure.
How long does an FHSS release take?
Several weeks, and longer at busy times. Request your determination before you sign a contract and start the release process while you are still searching. If you are bidding at auction, the money needs to be in your account before auction day, because a deposit is payable on the fall of the hammer.
What tax do I pay on an FHSS release?
The released amount, other than after-tax contributions, is added to your assessable income in the year you request it, with a 30% tax offset applied. The ATO withholds 30% upfront and the position is reconciled through your tax return. Your net outcome depends on your marginal rate, so speak with your accountant.
Does FHSS sit on top of my normal super caps?
No, it sits inside them. For 2026-27 the concessional cap is $32,500 and it already includes your employer's Super Guarantee. Contributions above the cap are not releasable under FHSS and may attract additional tax. The non-concessional cap is $130,000.
Can my partner and I both use FHSS?
Yes. Eligibility is assessed per person, so you can each access your own $50,000. You do not need to be married or de facto, so friends or siblings buying together can each use it. If one of you has previously owned property and is ineligible, the other can still use the scheme.
What if I do not buy a home in time?
You have 12 months from release to sign a contract to buy or build, with a possible 12-month extension. If you do not, you can recontribute the funds into super as a non-concessional contribution, or keep the money and pay FHSS tax of 20% on the assessable released amount.
Can I use FHSS for an investment property?
No. The home must be residential, in Australia, and one you live in. You need to occupy it for at least 6 of the first 12 months after it is ready. Investment purchases are excluded.
Can I use FHSS if my employer does not offer salary sacrifice?
Yes. You can make personal contributions from after-tax income and claim a deduction, which achieves a similar outcome. This also covers self employed buyers and anyone in non-standard employment. Employer Super Guarantee contributions are never eligible.
Are the earnings my actual super returns?
No. The ATO applies a deemed earnings amount using the shortfall interest charge rate, set quarterly and compounding daily, which has been running around 7.4% for 2026-27. It is calculated from the first day of the month each contribution was made and is unaffected by how your fund actually performed.
Next steps
Request an FHSS determination through ATO online services before you sign anything, and read the government overview at firsthomebuyers.gov.au. Then speak with your accountant about the tax position, because the net benefit depends on your marginal rate.
On the finance side, our property deposit calculator shows what your deposit supports once released, the mortgage repayment calculator models the loan, and the pre-approval to settlement guide covers the rest of the process.
Learn more about our team, or see our service areas across 220+ Sydney suburbs.
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Related resources
5% Deposit Scheme guide | Genuine savings | Deposit options | NSW stamp duty | First Home Owner Grant | Budgeting guide | Pre-approval to settlement
Service areas: 220+ suburbs across Sydney including Ryde | Parramatta | Baulkham Hills | Gladesville | Penrith | Chatswood | Castle Hill | Epping | Hornsby | Blacktown | Bankstown | Hurstville | Sutherland | Manly | Bondi | Sydney CBD and more
This article is general information only and is not tax or financial advice. It does not take your personal circumstances into account. Contribution caps, the shortfall interest charge rate and scheme rules change, so confirm current figures with the ATO before relying on them, and request an FHSS determination for your own maximum release amount. Speak with your accountant about the tax consequences of a release. Ali Hasani is an Authorised Credit Representative (CRN 567392) of Connective Credit Services Pty Ltd (Australian Credit Licence 389328).
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