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A guide to the first home super saver (FHSS) scheme

What is the FHSS scheme?

Owning your own place is a dream for many Aussies — but saving for a first home can be challenging, especially with rising property prices, inflation, and the cost of living.

If that’s your situation, the First Home Super Saver (FHSS) scheme may help you boost your deposit by saving through your super. The scheme lets you make voluntary contributions such as salary sacrifice[S2] (before-tax contributions) or personal contributions (after-tax contributions) into super and withdraw them later, subject to eligibility and limits. Before‑tax (concessional) contributions are generally taxed at a lower rate than your marginal tax rate, which may help your savings grow faster within the super environment.

When you’re ready to buy, you can apply to withdraw these contributions (up to $50,000 in total), along with associated earnings, to put towards your first home deposit.

How does the FHSS scheme work?

When you’re in the process of finding and buying your first property, you apply to the Australian Taxation Office (ATO) to release your contributions and any investment earnings those contributions made. The ATO calculates these earnings with a set rate and not the performance of your super fund.

What are the benefits of the FHSS scheme?

 

Benefits
 Considerations
You may save on tax while building your deposit inside super. Contribution caps apply. The annual limit for concessional contributions is $32,500, which includes your employer contributions. Plan your savings to stay within the cap.
Money saved in super is harder to access for other spending, which can help you stay on track towards your deposit goals. ATO releases take time. It can take up to 20 business days for the ATO to release your funds, so factor this into your plans.
The ATO adds earnings to your eligible contributions when you withdraw.

If your plans change, you may need to recontribute the amount to super or pay FHSS tax.

Investment risk still applies as the value of your super savings can go up or down.

Am I eligible for the FHSS scheme?

You can apply to use FHSS scheme if you:

  • Are 18 or over
  • Are a first home buyer and have not previously owned property in Australia
  • Have not previously requested a FHSS scheme release. Generally you can only request one FHSS release.
  • Will have your name on the title of the property you buy
  • Intend to live in the property as soon as practical for at least six months within the first 12 months
  • Must intend to buy or build a residential property in Australia
  • Have a FHSS scheme determination from the ATO before signing a sale contract

What are the FHSS scheme withdrawal limits?

The scheme has rules around how much you can contribute, and how much you can withdraw (and when). You can withdraw the following from your super:

  • up to 100% of your eligible personal after-tax contributions
  • up to 85% of eligible salary sacrifice contributions or personal contributions you’ve claimed a tax deduction for.

You can also withdraw any earnings the ATO adds to the contributions you made. The total amount you can withdraw is limited by the scheme’s cap ($50,000) and the amount the ATO has determined for you. And when you withdraw the money, it will go to you and not your lender.

You still need to apply to the ATO for a determination before you sign a contract to buy or build your first home. A determination is a document that shows the maximum amount you can withdraw from your super to buy your first home.

How much can I access under the FHSS scheme?

You can access up to:

  • $15,000 in a single financial year
  • $50,000 across all years.

Normal contribution caps still apply, including before tax and after-tax contributions caps.

Need some advice before you apply?

If you’re not sure how the FHSS scheme could work for your situation, then get in touch with our experts. As an Aware Super member, our advisers can explain the rules, check your options, and guide you through the process.[AD2]

You can request a callback with one of our advisors today.

How can I access my FHSS amount?

1. Contribute to your super: Make voluntary contributions, like salary sacrifice or personal contributions into your super.[S1]

2. Get your ATO determination: Log in to myGov > ATO > FHSS to request your determination. This will calculate how much you can withdraw through the FHSS scheme based on your contributions and the earnings applied to those amounts.

3. Sign a contract: Only sign a contract to buy or build after you have received your determination.

4. Request your FHSS release: Apply through the ATO to have your FHSS amount released. The ATO will pay the money directly to you, not your lender. You must request a determination before taking ownership of a property — getting the order wrong can affect your eligibility.

Allow a few weeks for the ATO to process your request and make the payment, so plan ahead for settlement.

How does tax work with the FHSS scheme?

When your FHSS scheme amount is released, the ATO withholds the tax before paying you. Here’s a quick breakdown of how tax is applied to your FHSS scheme amount:

  • Concessional contributions and earnings are taxed at your marginal tax rate, with a 30% tax offset applied.
  • Any after-tax contributions that are released aren’t taxed.

The ATO will calculate the tax, not your super fund.

What happens if my home-buying plans change?

Once your FHSS scheme amount is released, you generally have 12 months from the date of release to sign a contract to buy or build your first home. In some cases, you can apply to the ATO for an extension.

If you don’t go ahead with your property purchase or build, you can recontribute the released amount back into your super. Otherwise, you may have to pay a FHSS scheme tax, which is assessed by the ATO.

Keep clear records of your approvals and dates to avoid delays or unexpected tax.

FAQ

No, the FHSS scheme is only for purchasing your first home to live in and can’t be used to buy an investment property. Under the rules of the scheme, the property you purchase must be one you will live in for at least six months within the first 12 months of ownership.

Your employer’s regular super contributions (called super guarantee contributions) remain in your super fund and aren’t included in your FHSS scheme withdrawal amount. Only your voluntary contributions, like salary sacrifice or after-tax contributions, are eligible to be released under the FHSS scheme.

There are two main ways to make voluntary contributions:

  • Salary sacrifice contributions: Arrange through your employer to have part of your pre-tax salary paid directly into your super. This is taxed at the lower super rate of 15%, which could save you money if your marginal tax rate is higher.[S2]
  • After-tax contributions: Transfer money into your super from your bank account, using BPAY or direct deposit. Your super fund can provide you with your unique payment details to do this easily.[S1]

If you’re unsure which option is best for you or how to get started, check with your employer or reach out to your super fund for guidance.

The release process usually takes 15 to 20 business days from when you submit your request. This includes time for your super fund to transfer the money to the ATO, and for the ATO to pay you after tax has been deducted.

Yes, you and your partner can each save through FHSS scheme if you’re both eligible. Together, you could contribute up to $100,000 ($50,000 each) towards the same property.

Where to next? 

Need some help or advice?
Compare your advice options and book an appointment to help you feel more confident about your super.
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Voluntary personal contributions
See how making extra contributions can help you grow your super.
Learn about personal contributions
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Learn all about tax and super
Get a quick and simple breakdown on how tax applies to your contributions and withdrawals.
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[AD2] Members can get advice about their Aware Super accounts at no extra cost, or advice on their broader needs for a fee.

[S1] Before contributing, consider the current annual contribution limits. Exceeding these limits may reduce any tax benefits you could receive. Visit Grow your super for more information.

[S2] Salary sacrifice will save tax in many but not all circumstances and will cause a reduction in your take home pay.