First Home Super Saver Scheme guide
This guide explains how the FHSSS works, who is eligible, how to make contributions, how to withdraw your savings, and how the scheme coordinates with other first home buyer benefits. For a complete overview of the home buying process, read our pre-approval to home ownership guide.
Quick summary: The FHSSS lets eligible first home buyers withdraw up to $50,000 from their superannuation to put towards a deposit. Voluntary contributions are taxed at just 15% (instead of your marginal rate), and the ATO applies an earnings rate that is typically higher than standard savings accounts. You can contribute up to $15,000 per year, and the scheme works alongside the Home Guarantee Scheme, stamp duty concessions, and the First Home Owner Grant.
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 (personal contributions) or through salary sacrifice arrangements with your employer.
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 onwards. This amount is boosted by associated earnings, which the ATO applies at a set rate that is often higher than standard bank savings rates. The result is that your deposit grows faster than it would in a regular savings account, accelerating your path to home ownership.
Who can use the FHSSS?
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.
FHSSS withdrawals are widely accepted by lenders as genuine savings, which is an important consideration when applying for pre-approval through the Home Guarantee Scheme or any other home loan programme.
Why save for a deposit through FHSSS?
Tax advantages on contributions
Voluntary contributions made through salary sacrifice are taxed at just 15% when they enter your super fund. For most working Australians, this is significantly lower than the marginal income tax rate you would pay on the same income if it went into a regular savings account. The difference means more of your money goes directly towards building your deposit.
Personal contributions made from your after-tax income also provide tax deductions that can lower your overall tax liability. Understanding which contribution strategy works best for your income level and circumstances is important for maximising the benefit.
Earnings growth at set rates
The ATO applies a set earnings rate to your FHSSS contributions, known as the shortfall interest charge rate. This can provide a return that is usually higher than what you would earn in a regular savings account. For example, a one-off voluntary contribution of $10,000 could grow to approximately $11,000 over two years thanks to these applied earnings. This compounding effect accelerates your savings compared to leaving the same money in a bank account.
Understanding your Loan to Value Ratio (LVR) alongside your FHSSS savings helps you see how your deposit affects your borrowing capacity and whether you will need Lenders Mortgage Insurance. Our home equity calculator can show how your FHSSS savings integrate with your overall borrowing position, and our property deposit calculator helps you see what property price your deposit can support.
Real example: If you salary sacrifice $15,000 per year for 3 years, you contribute $45,000 to your super under FHSSS. After 15% contributions tax, approximately $38,250 enters your fund. With ATO-applied earnings, your total withdrawal could reach approximately $42,000 to $45,000. Compare this to saving the same $45,000 from after-tax income at a marginal tax rate of 32.5%, where you would only have approximately $30,375 after tax in a regular savings account.
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, where contributions are deducted from your pre-tax salary and taxed at 15% when entering your super fund. Alternatively, you can make personal contributions from your after-tax income, which provide tax deductions that lower your overall tax liability. It is important to note that employer Super Guarantee contributions cannot be used in the FHSSS.
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. Remember that the FHSSS limit of $15,000 per year sits within these broader contribution caps, not on top of them.
Strategic contribution planning helps you maximise your FHSSS benefits while staying within annual caps. Our budgeting guide for first home buyers helps you determine how much you can realistically contribute based on your income and expenses. If you are purchasing in areas like Ryde, Parramatta, or Baulkham Hills, understanding local property values helps you set a realistic savings target.
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 confirms the maximum amount you can withdraw based on your eligible contributions and associated earnings.
Once approved, you submit a release request and the ATO instructs your super fund to release the money. The funds are sent to the ATO, which deducts any applicable tax before paying the balance to you. The taxable portion of your withdrawal is added to your assessable income in the year you make the request, but a 30% tax offset applies to reduce the overall tax payable.
Plan your FHSSS application to align with your property search and pre-approval timeline. The process takes several weeks from application to receiving funds, so it is important to start early rather than waiting until you have found a property. Understanding your mortgage repayment capacity alongside your FHSSS withdrawal helps you determine your total borrowing power.
Ready to explore FHSSS for your first home?
We help first home buyers across Sydney coordinate their FHSSS strategy with home loan options from 35+ lenders at $0 cost to you.
Understanding FHSSS conditions
The FHSSS has strict conditions about how and when you use the withdrawn 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 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.
If you do not purchase within the required timeframe, you have two options. You can recontribute the funds back into your super account as a non-concessional contribution, or you can keep the funds and pay an FHSSS tax of 20%. Planning your home buying journey timeline carefully helps you meet these requirements.
Whether you are buying through private treaty, auction, or off the plan, the FHSSS conditions apply equally. For off-the-plan purchases, note that the 12-month requirement is measured from withdrawal, not from settlement, so the longer construction timeline needs careful planning. Our property purchase and valuation guide explains how each buying method works.
Combining FHSSS with other first home buyer benefits
The FHSSS works alongside other government programmes to maximise your total purchasing power. You can combine it with the Home Guarantee Scheme to buy with just a 5% deposit and no LMI, and your FHSSS withdrawal counts as genuine savings for the scheme's requirements. You can claim NSW stamp duty concessions saving up to $30,529, and the First Home Owner Grant worth $10,000 on new properties. The Help to Buy (Shared Equity) Scheme is another option where the government co-purchases with you using just a 2% deposit.
Read about the benefits and risks of the Home Guarantee Scheme to understand how it pairs with your FHSSS savings. If you are buying with a partner, both of you can each withdraw up to $50,000 from your respective super accounts, potentially creating a combined FHSSS deposit of up to $100,000.
Combined benefits example: A couple each contributing $15,000 per year for 3 years to FHSSS could withdraw approximately $84,000 to $90,000 combined. Add the Home Guarantee Scheme (5% deposit, no LMI), stamp duty exemption (up to $30,529 saved), and FHOG ($10,000 on a new property), and the total benefits package exceeds $100,000 in savings and support.
Choosing the right property with your FHSSS savings
Once your FHSSS savings are ready, you can begin your property search with a clear deposit in hand. Consider what type of property suits your needs and budget. A freestanding house offers full land ownership and renovation freedom but comes at a higher entry cost. A strata apartment or townhouse provides a lower entry point, often in better locations. Purchasing vacant land to build gives you customisation and access to the FHOG, but involves a longer timeline.
Our guide on how to buy the right property helps you compare these options, and our location, condition, and vibes guide helps you evaluate suburbs and neighbourhoods beyond just price. The bank valuation process will confirm whether the property meets your lender's requirements, and our settlement guide walks you through the final stages of your purchase.
Frequently asked questions
What happens if I do not buy or build a home within the timeframe?
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.
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. Use our property deposit calculator to see what property price your FHSSS savings can support.
What is 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 maximises your FHSSS benefit based on your income level.
Can I withdraw FHSSS funds if I am 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 and strengthen your purchasing position when applying for pre-approval.
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 ATO applies a 30% tax offset to reduce the overall tax payable on this income. This offset prevents 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 contributions if my employer does not offer salary sacrifice?
Yes. If your employer does not offer salary sacrifice, or if you are 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 and claim tax deductions on those contributions.
How does FHSSS coordinate with government first home buyer grants?
FHSSS withdrawals are separate from first home buyer grants and concessions. You can use FHSSS savings alongside NSW First Home Owner Grants, stamp duty concessions, and the Home Guarantee Scheme to maximise your total available funds. Layering multiple schemes together creates the strongest possible position for entering the property market.
How does FHSSS compare to the Home Guarantee Scheme?
The FHSSS and the Home Guarantee Scheme are complementary programmes that serve different purposes. The FHSSS helps you build your deposit faster through tax-advantaged superannuation contributions. The Home Guarantee Scheme lets you purchase with a smaller deposit (5%) and no LMI. Many first home buyers use both schemes together. Read about the benefits and risks to decide if this combination suits you.
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 the 20% FHSSS tax. Your mortgage broker can help you understand your options if your circumstances change unexpectedly.
Take the next step
The FHSSS is one of the most effective tools available to first home buyers for building a deposit faster. Combined with the Home Guarantee Scheme and NSW stamp duty concessions, it can transform your ability to enter the property market. Use our property deposit calculator to see what your FHSSS savings can support, our home equity calculator to model different LVR scenarios, and our mortgage repayment calculator to plan your ongoing budget. Our choosing the right finance guide helps you compare loan types and features.
Learn more about our team, or explore our service areas across 220+ Sydney suburbs.
Get expert guidance on FHSSS and your home loan
We help first home buyers coordinate their FHSSS strategy with home loan options from 35+ lenders at $0 cost to you.
Email: hello@buyvest.com.au
Related resources for first home buyers
Continue building your knowledge with our Home Guarantee Scheme guide for 5% deposit purchases with no LMI, our genuine savings requirements guide to understand what lenders expect from your deposit, our NSW First Home Owner Grant guide for the $10,000 government grant on new homes, our deposit options guide for every pathway to your first deposit, and our budgeting guide to plan your finances and contribution strategy.
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
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.
All information on this website is subject to change without notice.