First Home Super Saver (FHSS) Scheme

The First Home Super Saver (FHSS) scheme allows you to make voluntary contributions to your superannuation and then withdraw them (plus associated earnings) to buy your first home. It's one of the most powerful tax incentives available to first home buyers.

How the FHSS Scheme Works

You make voluntary contributions to super (concessional or non-concessional), they grow at the concessional tax rate of 15%, and when you're ready to buy, you apply to the ATO to release the funds. The released amount includes:

• Your eligible contributions
• Associated earnings (calculated using a deemed rate of return set by the ATO)
• Minus applicable tax (concessional contributions released are taxed at your marginal rate less a 30% tax offset)

Maximum Release Amount

You can withdraw up to $50,000 of eligible contributions per person. Couples can each withdraw $50,000 — effectively $100,000 towards a home. The earnings on those contributions are also released (uncapped).

Tax Benefits

The FHSS scheme's biggest advantage is the tax saving on concessional contributions:

• Contributions are taxed at 15% inside super instead of your marginal rate (up to 47%)
• Investment earnings are taxed at 15% instead of your marginal rate
• On withdrawal, concessional contributions are taxed at your marginal rate minus a 30% offset — most people pay little or no additional tax
• Non-concessional contributions are withdrawn tax-free

Eligibility Requirements

• You must never have owned a home (or an interest in a home) in Australia before
• You must be at least 18 years old
• You must not have previously made an FHSS release request
• The released amounts must be used to buy or construct your first home within 12 months of the release date (extension possible in limited circumstances)
• You must occupy the home within 12 months of purchase

Making Contributions

Both concessional (salary sacrifice, personal deductible) and non-concessional contributions count towards the $50,000 cap. The contributions must be made from 1 July 2017 onwards and must be voluntary (not the mandatory Super Guarantee from your employer).

Applying for Release

Step-by-step process:

1. Request an FHSS determination from the ATO via myGov — this tells you the maximum amount you can withdraw
2. Enter into a contract to purchase or build a home (or you can apply before the contract if you need funds for deposit)
3. Apply to the ATO for release of the funds
4. The ATO releases the amount to you (not your super fund) — usually within 6-10 business days
5. Complete the purchase within 12 months

Strategy Tips

• Maximise concessional contributions to get the full tax benefit — salary sacrificing $15,000 per year for 3 years builds the $50,000 cap
• Couples should both contribute to double the benefit
• Use the carry-forward concessional cap rules if your super balance is under $500,000
• Start early — the compounding tax benefits grow significantly over 2-3 years

What Happens If You Don't Buy?

If you don't use the released amount to buy a home, you can re-contribute it to super (it won't count towards your non-concessional cap if re-contributed within 30 days). Otherwise, the amount remains with you and is subject to regular tax rules.

How the FHSS Tax Saving Works — Worked Example

The scheme's advantage is the gap between your marginal tax rate and the 15% super contributions tax. Say you salary sacrifice $15,000 in a year while earning $80,000 (30% marginal rate, plus 2% Medicare levy). Outside super, that $15,000 would attract about $4,800 of tax. Inside super it attracts 15% — $2,250 — plus 15% tax on the earnings while it sits in the fund. When you apply to release the money, eligible concessional contributions come out with a 30% offset applied (so the 15% contributions tax is effectively reversed), and non-concessional contributions come out tax-free. For most people the scheme saves roughly $1,500–$2,000 per year on the maximum contribution, and couples can each use their own $50,000 limit on the same property.

2026 Application Timeline

1. Contribute voluntarily (salary sacrifice or personal) — up to $15,000 per financial year, $50,000 total since 1 July 2017.
2. Log into myGov, go to ATO online services, and request an FHSS determination — do this before you sign a contract.
3. Request the release, then buy or build within 12 months (extendable to 24 months).
4. If you don't buy, re-contribute the amount to super — it won't count against your non-concessional cap.

Eligibility is assessed per person, so two buyers can each withdraw their own savings. You must never have owned property in Australia (hardship exceptions apply) and you must intend to live in the home. If you have previously had a release, you cannot use the scheme again.