First Home Super Saver scheme explained

Saving your first home deposit isn’t easy. But the Australian Government’s First Home Super Saver (FHSS) scheme could help you get there faster and move into your own home sooner.


how does the FHSS scheme work?


The first thing most people want to know about the First Home Super Saver (FHSS) scheme is whether they can use their super to buy a house, so let’s start there.

The FHSS scheme lets you save a first home deposit by making voluntary before or after-tax contributions to your super. The FHSS scheme can be a way to pay less tax so you can put more money towards your first home deposit.

You can’t use contributions made to your super by anyone else — employers, government co-contributions, or a spouse — instead, you use the FHSS scheme to save your own contributions. So rather than using a savings account, you save up for your first home deposit in your super account.

Everyone’s tax circumstances are different, and it’s worth seeking advice to make sure the FHSS scheme is right for you.


top 3 things to know about the FHSS scheme

Your contributions

Only your own eligible personal contributions made from 1 July 2017 count towards the total amount that can be released to you from your super under the FHSS scheme.

Property type

The property you buy must be a residential property — not vacant land (unless you’re building on it), a motor home, houseboat, or any other type of property that can’t be a residence.

Timeframe to buy

Once you withdraw your FHSS scheme funds, you’ll need to sign a contract to buy a property or start the construction of your home within 12 months.



how to make contributions to the FHSS scheme


You can make voluntary before or after-tax (or both) contributions to your super under the FHSS scheme. Let’s learn a bit more about them.



Before tax

Called concessional contributions because most people (those earning less than $250,000 a year) get a tax concession. They only pay 15% tax on the salary they ‘sacrifice’ straight into their super, instead of their individual income tax rate (marginal tax rate).

The concessional contribution cap of $27,500 applies to these contributions.



After tax

Called non-concessional contributions because there’s no tax concession. People pay their marginal tax rate on their income. But they may be able to claim a tax offset on these contributions when they do their tax return at the end of the financial year.

The non-concessional contribution cap of $110,000 applies to these contributions.







how much can you save under the FHSS scheme?


If you’re eligible for the FHSS scheme, you can use your super account to save up to $15,000 each financial year, up to $50,000 in total across multiple years. You’ll also get any associated earnings from these contributions when the time comes to withdraw the funds.

Depending on the price of the property you want to buy, you may also need additional savings to reach your deposit target and cover other home-buying expenses like legal fees or stamp duty.



who is eligible for the FHSS scheme?


To use the FHSS scheme, you need to meet the eligibility criteria, including:



Be 18 years old or over when you apply to release the funds you’ve saved.

To live in

Intend to live in the property you’re buying as soon as it’s practical to move in, for at least 6 months of the first 12 months you own it.

First property

Haven’t owned a property in Australia before*.

*If you’ve suffered a financial hardship event and lost your home, you may be eligible to apply for the financial hardship provision under the FHSS scheme. Find out more on the ATO website.






first home super saver scheme example


Ash is saving for a deposit and wants to get on the property ladder. Ash crunches the numbers to weigh up saving in the bank versus making before-tax contributions and using the FHSS scheme to build up savings in super.


Bank savings Monthly Super savings Monthly
From gross income $866 From gross income $866
Minus 34.5% (income tax + Medicare levy) – $299 Minus 15% concessional contributions tax (before tax) – $130
Savings after tax = $567 Savings after tax = $736


As you can see, using the FHSS scheme helps Ash save an extra $169 every month. Multiplying that by 12 months, Ash saves an extra $2,028 each year with the FHSS scheme.

Ash could save the last $20,000 of the deposit in just over 2 years versus saving the same amount in a bank account in just under 3 years.

It’s important to note, the FHSS scheme allows you to release:

  • 100% of your after-tax contributions
  • 85% of your before-tax contributions and associated earnings (these are not the same as investment earnings from your super fund; they’re calculated using a deemed rate of return instead). The good news is that’s an extra 15% of your contributions staying in your super to boost your retirement savings.






how do I withdraw my money to buy a house?


Once you’ve saved your money under the FHSS scheme and you’re ready to buy a property, there are a couple of steps to complete to withdraw your money.


Request a determination from the ATO

Under the FHSS scheme, you have 12 months to sign a contract to buy or build a home after you withdraw your first home super savings. So, when you’re ready, apply for your FHSS scheme determination from the ATO using myGov. You’ll be told by the ATO how much you can withdraw and what the income tax is.

By saving and releasing funds through the FHSS scheme, you’re entitled to a 30% tax offset for the released amount in that income year. The ATO will withhold tax that will be calculated at either:

  • your marginal tax rate less a 30% offset, or
  • 17% if the ATO is unable to estimate your expected marginal rate.

Determination requests made after 1 July 2022 have a $50,000 withdrawal limit for eligible contributions, but it’s $30,000 prior to 1 July 2022.


Request your funds from the ATO

Once you have your determination from the ATO, the next step is to ask them to release your FHSS savings by submitting a ‘request for release’.

After that, the ATO tells your super fund to release your FHSS savings to the ATO, the ATO deducts tax and deposits the funds into your bank account — and that whole process takes 15–25 business days.



Buy your home

From the date of your ‘request for release’ you’ll have 12 months to sign a contract to buy or build your first home. You need to notify the government within 28 days of signing the contract via myGov. If you don't, or you choose to keep the funds, you may be subject to the FHSS scheme tax.




what's next?


If you want to buy your first home as soon as possible, use these helpful tools and tips.



Speak to a superannuation expert

There’s lots to consider, so chat with a HESTA superannuation expert — to ask questions, weigh up whether it’s right for you, or start using the FHSS scheme — book a time to chat now.

tip jar budget


Making contributions

What are concessional and non-concessional contributions? What impact can they have on tax? Read more about out the two ways you can contribute to your super.


FHSS estimator

Is the FHSS scheme right for you? Use the government’s First Home Super Saver scheme online estimator to find out.