What is the First Home Super Saver Scheme?
The First Home Super Saver (FHSS) Scheme allows you to withdraw voluntary contributions made into your super fund to put towards a deposit for your first home. This can mean potentially significant tax savings, as well as investment returns.
When the time comes, you can make an FHSS release request for the money contributed, plus earnings, to help you buy a home. You can only withdraw voluntary contributions (and associated earnings) under the FHSS, not super guarantee or spouse contributions, and there are limitations on how much and which funds you can access.
How does the First Home Super Saver Scheme work?
The First Home Super Saver Scheme may allow you to withdraw concessional or non-concessional superannuation contributions. Concessional contributions are taxed at 15% and subject to the annual concessional contribution cap ($32,500 for the 2026-27 financial year), while non-concessional contributions are made using funds you’ve already paid income tax on. You can contribute up to $15,000 in a given year and $50,000 in total.
Depending on how much tax you’ve paid on money you’ve contributed to your super, you might be limited on how much you can withdraw. The Australian Taxation Office (ATO) allows you to withdraw up to 85% of your eligible concessional contributions and up to 100% of your after-tax contributions, plus earnings. That means if you’ve contributed $15,000 in a given year in concessional contributions, only $12,750, plus earnings, will be considered towards your FHSS release.
When you make your withdrawal, you also receive a 30% tax offset on the amount you take out. That means if your marginal tax rate is 37%, you’ll effectively pay only 7% on your FHSS release. When you make a withdrawal, the ATO will withhold the tax payable before it releases the funds to you.
How much can I save with the First Home Super Saver Scheme?
The most you can contribute through the FHSS scheme is currently $50,000. Couples are allowed to pool their savings, so could potentially release $100,000 to purchase the same property. When the time comes, you can request an FHSS withdrawal from the ATO, who will calculate your maximum releasable amount, including the value of your eligible contributions (100% of non-concessional contributions and 85% of concessional contributions) and any associated earnings.
The earnings the scheme considers on the funds you contribute are calculated using a ‘deemed’ rate of return, not the actual rate your super fund delivers. The deemed rate is based on the ATO’s shortfall interest charge (SIC) rate, which changes every quarter.
How do I withdraw my super using the First Home Super Saver Scheme?
To withdraw your super, you need to request an FHSS determination from the ATO via myGov. The ATO will let you know the maximum amount you can release under the scheme. After you’ve received this information, you can apply for a release of your super. You can only do this once.
The ATO will then issue a release authority to your super fund. The money will go through the ATO, which will deduct the appropriate amount of tax, and then pay it to you. The ATO says it can take between 15 and 20 business days (or about three to four weeks), in most cases, for you to receive the money.
Once your savings have been released, you’ll need to sign a contract to purchase or construct a home within 12 months from the day you requested the release. If you don’t, the ATO may grant you a 12-month extension. You can also re-contribute the amount withdrawn back into your super fund or keep it and pay a tax of 20% of the released amount.
First Home Super Saver Scheme benefits
One of the main benefits of the First Home Super Saver Scheme is potential tax savings. By saving within your super fund, you may be able to take advantage of favourable tax treatment.
For instance, say you earn $80,000 a year and want to save $20,000 with plans to buy your first home in a couple of years. If you save that money using your after tax income, perhaps in a savings account or by investing in exchange-traded funds (ETFs), you’ll pay tax on that money at your marginal rate. For the 2026-27 financial year, that could mean handing about $6,400 over to the ATO (assuming a 30% tax rate plus the 2% Medicare levy). You’ll also pay tax on any interest earnings or investment returns you realise at your marginal rate.
However, if you make $20,000 in concessional super contributions over two years, you could pay only $3,000 in tax. After two years when you’re ready to buy, you may be able to make an FHSS withdrawal of up to $17,000 (85% of your voluntary concessional contributions), plus earnings, calculated using the SIC rate. While this amount is taxed, with the 30% offset, you could effectively pay just 2% tax on the withdrawn amount.
And, depending on how you manage money, there might be an added benefit of effectively locking your savings away from you. There are limited ways a young person can access their super, the FHSS being one of them, so you could be less likely to impulsively dip into your savings.
Is the First Home Super Saver Scheme worth it?
According to the government, the First Home Super Saver Scheme can boost most people’s savings by around 30%, compared to saving with a standard savings account.
Who is eligible for the First Home Super Saver Scheme?
To be eligible for the First Home Super Saver Scheme you must:
- Be at least 18 years old
- Have never owned property in Australia, including investment properties and vacant land (unless you’ve experienced financial hardship)
- Have not previously requested your super to be released under the scheme
- Have your name on the title of the property you buy
What home can I buy with the First Home Super Saver Scheme?
You must use an FHSS withdrawal to buy a residential property you intend to live in, which can include vacant land if you’re planning to build. It can’t be an investment property or other type of home, such as a houseboat or motor home. You need to occupy the premises for at least six of the first 12 months after purchasing or constructing it.
Other ways for first home buyers to save
- First Home Owners Grants and concessions – the amount that’s on offer depends on your state or territory.
- Australian Government 5% Deposit Scheme – eligible homebuyers can purchase a home with a deposit of as little as 5% (2% for eligible single parents) and avoid lenders mortgage insurance (LMI).
