Unlocking the First Home Super Saver Scheme (FHSS)
Saving for a deposit is one of the biggest challenges for first home buyers. The First Home Super Saver Scheme (FHSS) is designed to help, but the rules can feel confusing.
In this resource, we break it down so you can decide if it’s worth exploring.
We’ll cover:
What the FHSS is and how it works
Eligibility rules
Contribution types and limits
The withdrawal process (and timing traps to avoid)
Pros, cons, and strategic tips
This resource supports Episode 9 of the First Home Unlocked podcast, part of our Grants & Schemes Series.
What is the First Home Super Saver Scheme?
The FHSS is a government initiative that lets you make voluntary contributions into your super fund and later withdraw those funds, plus associated earnings, to use as part of your first home deposit.
The big advantage? You may be able to grow your deposit faster thanks to lower tax rates inside super.
But it only applies to voluntary contributions, not the super your employer pays you.
Just a reminder: this information is general in nature. Always do your own research or speak to your accountant or financial planner before using the scheme.
Who’s Eligible?
To use the FHSS, you must:
Be at least 18 years old
Have never owned property in Australia (including land or investment properties)
Be named on the title of the property you buy
Plan to live in the home for at least 6 months within the first year
Never have withdrawn funds under the FHSS before
If you’re buying with a partner, you can both use the scheme individually, as long as you each meet the criteria.
What Are the Benefits?
There are three key advantages to saving through super:
Lower Tax on Contributions
Voluntary concessional contributions (like salary sacrifice) are taxed at just 15%, often much lower than your marginal tax rate. That means more of your money goes towards your deposit.
Tax Offset on Withdrawal
When you withdraw your funds, any assessable portion is taxed at your marginal rate but with a 30% tax offset, reducing the tax you owe.
Simulated Earnings Boost
The ATO applies a fixed earnings rate (currently 6.78%) to your contributions, regardless of how your super fund actually performed. This helps simulate growth over time, often higher than regular savings accounts.
Calculated by the ATO at the shortfall interest charge rate.
What Are the Trade-Offs?
Like any strategy, there are some limitations:
You can only use the scheme once
The scheme can only be used to buy your first home. If your circumstances change or you decide not to buy, that money stays locked away until retirement.
Timing is critical
There are very specific rules around when you can request a withdrawal, when you can sign a contract, and how long it takes for the money to be released. We’ll cover that below, but it’s a common area where things can go wrong if not planned carefully.
Less flexibility than normal savings
Once the money’s in super, you can’t access it unless you meet all the criteria. You can’t dip into these savings in an emergency or change your mind mid-process. So, it’s important to have other savings or buffers in place if unexpected costs come up.
How to use the First Home Super Saver Scheme
Step 1: Making FHSS Contributions
There are two types of contributions you can make:
Concessional Contributions
These are made before tax (e.g. salary sacrifice or personal contributions claimed as a tax deduction). They’re taxed at 15% inside your super fund. This means only 85% is counted toward your maximum releasable amount under the Super Saver Scheme.
Example:
If you salary sacrifice $15,000, only $12,750 counts toward your maximum FHSS release.
Tip: If you have a HELP or student debt, just be aware that salary sacrificing into super can impact your repayment income. It’s worth checking with your employer or accountant to make sure enough tax is being withheld so you don’t get caught out at tax time.
Non-Concessional Contributions
These come from your after-tax income (e.g. transferring savings from your bank account into super without claiming a deduction). Because you’ve already paid tax, 100% of these contributions count toward your FHSS total and aren’t taxed again at withdrawal.
Learn more about the different types of super contributions.
Contribution Limits
Even though general super rules allow higher contributions, the First Home Super Saver Scheme has its own caps.
Only the following amounts count towards your maximum releasable amount under the scheme:
Max $15,000 per financial year
Max $50,000 in total across all years
So even if you contribute more to super in a given year, only $15,000 of eligible contributions can count toward the scheme in that year.
Your maximum releasable amount is calculated as:
85% of concessional contributions, plus
100% of non-concessional contributions, plus
Deemed earnings (using the ATO’s fixed rate)
Step 2: Withdrawing Your Funds
When you're ready to use your FHSS savings:
1. Request a Determination Letter
This tells the ATO you’re preparing to buy. You must do this before signing a contract, otherwise, your deposit savings might stay locked in super until retirement.
Under the Super Saver Scheme rules, once you sign a contract, you may be considered a property owner, even if settlement hasn’t happened yet. This would make you ineligible to access your funds, and the money stays locked in super until retirement.
2. Request the Release
Once your determination is confirmed, you can request the release of your funds via MyGov. Key points:
You can only do this once
It takes 15–20 business days to receive the money
You have 12 months to buy a property (with a possible 12-month extension)
If you don’t buy within that time, you must recontribute the funds (less tax) or pay extra tax
Other important considerations:
If you've already signed a contract after getting your determination letter but haven’t requested to release the funds yet, you’ll need to request the release within 90 days of signing.
If you have an outstanding debt with the ATO, this will be deducted from your release amount.
Tax at Withdrawal
Here’s how the different parts are taxed on withdrawal:
Concessional contributions and deemed earnings are taxed at your marginal tax rate, but you’ll receive a 30% tax offset to reduce what you owe.
Non-concessional contributions are not taxed again because you’ve already paid income tax on them.
Final Thoughts
With the right planning, the First Home Super Saver Scheme can be a strategic way to grow your deposit and reduce tax.
Always check your super fund allows FHSS withdrawals
Understand the limits, timing rules, and tax impacts
Have other savings and buffers in place
Consider speaking with a financial planner or accountant to explore if it suits your situation
🎧 Want more support?
Listen to Episode 9 of First Home Unlocked we walk through the entire process in plain English, with examples, pros and cons, and real timing traps to avoid. Or book a free Get to Know You Chat and we’ll help you take the next step with clarity and confidence.
We always recommend doing your own research and speaking to your accountant or financial planner to see if this is the right fit for you.
Learn more:
