First Home Super Saver Scheme (FHSS)

How it works in one paragraph

You make voluntary contributions into your existing super fund (pre-tax via salary sacrifice, or post-tax with or without a deduction). You can later apply to the ATO to release those contributions — plus associated earnings — to help pay for your first home. Because the money sat inside super, it's been taxed at 15% not your marginal rate. The release itself gets further tax concessions.

What you can contribute and release

• Up to $15,000 per financial year can count toward FHSS (counted within normal contribution caps, not on top)
• Up to $50,000 lifetime can be released under the scheme
• 100% of non-concessional contributions can be counted toward the $15k/year limit
• 85% of concessional contributions can be counted (the other 15% is the contributions tax)
• Employer SG and mandated contributions do not count — only voluntary

Are you eligible?

All of the following must be true:

1. You're 18 or older at the time you request release
2. You have never owned real property in Australia (there's a financial-hardship waiver if you did but lost it — ATO will assess on application)
3. You haven't previously requested an FHSS release
4. You intend to live in the property as your main residence for at least 6 months within the first 12 months of owning it

Eligibility is assessed individually, not as a couple. Two first-home buyers can each release up to $50,000, giving a joint FHSS deposit of up to $100,000.

The exact process

1. Make voluntary contributions over one or more FYs, keeping the running $15k/FY and $50k lifetime limits in mind.
2. Apply to the ATO for an FHSS determination via myGov → ATO → Super. This tells you exactly how much you're eligible to release. You can request this before you sign a contract.
3. Request release. The ATO tells your fund to send the money (plus deemed earnings) to the ATO.
4. ATO withholds tax on the taxable component (marginal rate less a 30% offset, so effectively very low) and pays the net amount into your bank account, typically within 15–25 business days.
5. Sign a contract to buy or build within 12 months of the release request, or apply for a 12-month extension.

What the tax saving actually looks like

If you're on the 32% marginal rate (inc. Medicare) and salary sacrifice $15,000 in a year: the bank-style "save $15k" option costs you $4,800 in tax outside super, leaving $10,200 in the bank. Inside super, the same $15,000 contribution has $2,250 contributions tax taken, leaving $12,750. On release, the taxable portion is taxed at your marginal rate less a 30% offset — which at a 32% marginal rate means an effective 2% extra tax, or about $255 on the taxable component. Net: you end up with roughly $12,000–$12,300 released vs $10,200 saved in a normal account. Over $50,000 of lifetime contributions that's typically a $4,000–$8,000 boost, depending on marginal rate.

What most people miss

1. Earnings are deemed, not actual

The ATO doesn't use your fund's actual return on your FHSS contributions. It uses a deeming rate (the 90-day bank-bill rate plus a margin, typically 4–6% p.a.). This means you don't get the upside if your fund had a blockbuster year — but you also can't be worse off if your fund lost money.

2. Contribution caps still apply on top

FHSS doesn't give you extra cap room. $15k of salary sacrifice that's earmarked for FHSS still counts toward your $30k concessional cap. If you're already using carry-forward, check the combined number doesn't overshoot.

3. You must request the determination before signing

If you sign a contract for your first home before you've requested an FHSS release determination, you lose eligibility entirely. Lots of people miss this and it's irreversible. Request the determination first — you have 12 months from the request to sign.

4. You can combine FHSS with other schemes

FHSS stacks with the First Home Guarantee (low deposit, no LMI) and any state-based first home buyer concessions on stamp duty. Using all three together can turn a 20% deposit requirement into a 5% deposit plus tax savings.

Should you use it?

FHSS is worth it for almost anyone planning to buy their first home in 1–5 years with a disciplined savings plan. If you're buying within 6 months, the release lead time eats into the benefit. If you're more than 5 years away, the contributions stack well — but so does keeping the money outside super for flexibility. Most planners treat FHSS as the second-best dollar (after matching employer contributions) if buying a home is a medium-term goal.

The one-minute version

• Save inside super, release for a first-home deposit with tax concessions.
• $15k/FY, $50k lifetime. Voluntary only — SG doesn't count.
• Apply for a determination through myGov before signing a contract.
• Roughly a 15–25% boost on equivalent after-tax savings for median-income buyers.
• Stack with First Home Guarantee and state stamp-duty concessions.