The First Home Super Saver (FHSS) scheme is a government initiative offered to first home buyers. It allows eligible Aussies making voluntary contributions into their super fund to later withdraw the majority of those additions and use them as a deposit on their first home. It offers tax advantages and potentially larger returns.
We've all heard how hard it is for young Australians to buy their first property in today's market, given sky-high house prices, wage growth that isn't keeping pace with inflation, and the 'cozzie livs' - that is, the cost of living crisis. So could saving for a housing deposit through your super fund make it any easier?
What is the First Home Super Saver scheme (FHSS)?
First home buyers using the FHSS scheme can withdraw:
- Up to $15,000 of additional payments (and associated earnings) made within any one financial year,
- Up to a total of $50,000 per person
So if you're buying a house with a partner, you could withdraw a combined total of $100,000 (before tax).
Putting some of your pre-tax salary into your super fund can also save you tax - a win-win for many future home owners. Volantary super contributions can be concessional (taxed at a discounted rate of 15%) and non-concessional (already taxed at your marginal rate).
Those partaking in the scheme can withdraw, within the above-mentioned limits:
- 100% of their non-concessional (after-tax) amounts
- 85% of eligible personal voluntary super contributions they've claimed a tax deduction for
- 85% of salary sacrificed amounts
- Bear in mind that Australia's superannuation system allows a maximum of $30,000 to be contributed to your super at the concessional tax rate of 15% each year, which includes the minimum 12% super guarantee from your employer. Though, if you've neglected your super in recent years, you might be able to carry forward unused concessional contributions.
Concessional & non-concessional super contributions
| Concessional contributions | Before-tax super contributions. Include employer Super Guarantee payments, salary sacrifice amounts, and personal contributions you claim as a tax deduction. They're taxed at 15% inside super, up to the annual concessional cap (currently $30,000, indexed annually alongside average weekly ordinary time earnings). |
| Non-concessional contributions | After-tax contributions made from your take-home income. You don't claim a tax deduction for them and they're not taxed again when they enter your super. They're subject to a separate annual non-concessional cap. |
As an example of how concessional and guaranteed employer contributions collide, let's assume you earn $120,000 annually. That being the case, your employer will have to pay at least $14,400 (an additional 12% of your earnings) into your super fund each year. That means you can only contribute an extra $15,600 into your super at the concessional rate.
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Compared to a First Home Owner's Grant, the FHSS might not seem like much. A grant could land you up to $50,000, depending on your state or territory, whereas the FHSS may only boost your deposit by several thousand after a couple of years of salary sacrificing. Not to mention, it can reduce your super balance.
On the other hand, the grants are limited to one per household, whereas the FHSS can be used by multiple people, allowing a couple access to up to $100,000. And you may choose to use the FHSS scheme in conjunction with a grant and/or the 5% Deposit Scheme.
Given this scheme can be quite complicated and may present hiccups during the purchasing process, you may want to consider speaking to a financial adviser to see if it's the right option for you.
Tens of thousands of Aussies use the FHSS to get on the property ladder
While it's undoubtedly a complex scheme with plenty of 'ifs', 'buts', and 'maybes', droves of home buyers have turned to the FHSS.
Around 81,300 requested to withdraw savings from their super fund under the scheme in the period between July 2019 and June 2025. Of those, around 63,500 successfully withdrew a total of $1.1 billion to put towards house deposits, according to data provided by the ATO.
That equals an approximate average of $15,750 per person.
The most recent data covering a 12-month period relates to the 2024/2025 financial year. That year, around 18,300 people requested access to their super through the scheme, with around 15,200 of those finding success. They withdrew a total of $303.6 million - an average of nearly $20,000 per person.
The number of those unsuccessful in receiving access to their super might appear alarming to those considering using it, but there are a few simple explanations for the discrepancy.
Some likely applied to the scheme despite being ineligible. Others might have found their super fund didn't release all the requested amount - perhaps because there was no money to withdraw or the fund's rules disallowed such a release.
Why use the FHSS to buy your first home?
It's all about the tax savings, baby. Concessional super contributions are only taxed at 15%, as opposed to your marginal income tax rate, so salary sacrificing into super can save serious coin. Not to mention, you might also be able to withdraw earnings on those contributions.
Thus, storing what's expected to be your house deposit in your super account might mean you get out more than you put in. It's worth noting that the earnings on the contributions you can withdraw are restricted and may not reflect your super fund's returns.
However, when it comes to withdrawing these funds and associated earnings, the amount you pull for a house deposit will be subject to a 'withdrawal tax' equal to your marginal tax rate plus the Medicare levy, minus a 30% offset. This tax will be automatically taken from your withdrawal before you receive the cash.
So, if your marginal tax rate is 32.5% and the Medicare levy is 2%, your withdrawal will be subject to a tax of 4.5% (32.5% marginal rate + 2% Medicare levy - 30% offset). That would come to a total of $2,250 on a $50,000 withdrawal.
While it's rarely fun to pay tax, such a rate is far more attractive than what's typically paid on other earnings. For instance, interest from a savings account or capital gains earned through investing are both generally taxed at your margin tax rate.
How much does the FHSS give in returns?
Beyond your voluntary concessional and non-concessional super contributions, you can also withdraw the associated earnings through the FHSS. But the earnings tied to funds withdrawn under the FHSS don't actually reflect those of the rest of your super balance.
Instead, the funds are 'deemed' to earn an annual return of the 90-day Bank Bill rate plus 3%. The resulting figure is known as the 'shortfall interest charge' (SIC) and it's updated quarterly. The current SIC rate (October-December 2025) is 6.61%.
Given that some super funds have been known to achieve similar returns relatively consistently, 6.6% per annum mightn't seem overly enticing. But it's all about perspective. You'll likely struggle to find a savings account or term deposit with an interest rate anywhere near that.
Still, it's safe to say the potential tax savings generated through this scheme is the main attraction.
How much could you save with the FHSS?
Let's use the Government's FHSS calculator to consider how the FHSS could impact someone with a taxable income of $70,000 who salary sacrifices $200 a week ($10,400 a year) into their super:
- Impact on take-home pay: $134 per week (less than $7,000 a year)
- Deposit available through FHSS after two years: $18,386
- Deposit if they saved $200 a week outside of super: $14,363 (assuming a 4% p.a. savings account rate)
For other incomes, salary sacrificing the same amount over two years generates different results, as the government's estimator demonstrates:
| Taxable income | Annual reduction to take-home pay | Deposit available after two years | Additional savings* |
|---|---|---|---|
| $40,000 | $11,675 | $27,749 | $3,709 |
| $50,000 | $11,150 | $27,437 | $4,583 |
| $60,000 | $9,975 | $26,384 | $5,900 |
| $70,000 | $10,025 | $26,540 | $5,939 |
| $80,000 | $10,175 | $26,695 | $5,781 |
| $90,000 | $10,200 | $26,713 | $5,754 |
| $100,000 | $10,200 | $26,713 | $5,754 |
Source: CSC First Home Super Saver Scheme calculator *assuming a 4% p.a interest rate on a savings account
As you can see, not everyone can accelerate their savings to the same degree by contributing the maximum $15,000 each year over two years.
What about smaller, longer-term contributions?
The example above is based on contributing the maximum annual amount of $15,000 for two years. This is hardly ideal for someone earning $40,000 a year, as this would reduce their annual take-home pay by more than $11,000 (over $200 per week).
Many first home buyers may want to take their time, contributing smaller amounts over a longer period. We used the same estimator for $6,000 in annual concessional contributions over five years to see the difference it would make to a person's savings compared to a 4% p.a. savings account.
Taxable income | Annual reduction to take home pay | Deposit available after five years | Additional savings* |
$40,000 | $4,795 | $30,526 | $4,686 |
$50,000 | $4,095 | $29,230 | $7,559 |
$60,000 | $3,990 | $29,381 | $8,061 |
$70,000 | $4,040 | $29,554 | $7,915 |
$80,000 | $4,080 | $29,586 | $7,753 |
$90,000 | $4,080 | $29,586 | $7,753 |
$100,000 | $4,080 | $29,586 | $7,753 |
Source: CSC First Home Super Saver Scheme calculator *assuming a 4% p.a interest rate on a savings account
As the above chart shows, it's not just lower income earners that more spread-out contributions appear to benefit. Slow and steady may just win the race when it comes to using the FHSS.
Who can use the First Home Super Saver scheme?
As you may have already assumed, you can only make contributions and withdrawals via the FHSS if you've never owned a property in Australia before. The scheme's not designed to help you add a fourth investment property to your portfolio.
But there is one exception. If you have lost ownership of a previous property due to bankruptcy, divorce or relationship breakdown, loss of employment, a natural disaster or another particular reason, you might also be eligible under the financial hardship provision. You can apply for the provision through myGov or by filling out an application form via the ATO.
You must also intend to live in the property for at least six of the first 12 months you own it and be over the age of 18 in order to request a withdrawal. Although you can start making contributions at any age. And, perhaps unsurprisingly, you also need to be a member of a registered super fund in Australia.
Importantly, the FHSS is independent of other concessions for first home buyers, such as the First Home Owner's Grant, so you aren't limited to one or the other.
Eligibility
To be eligible for the FHSS scheme, you must:
Be at least 18 years of age
Never have owned a property in Australia, including a home, investment property, vacant land or company title interest in land, or
Be accepted under the financial hardship provision
Live in the property for at least six of the first 12 months of ownership, or after it is practical to move in
Never have applied for the scheme previously
What properties can be purchased with the scheme?
Vacant land isn't eligible for the FHSS scheme. However, if you're building your own home, the building contract is eligible. Those building their first home need to put their super withdrawal towards this, not the deposit on their block of land.
Some types of living quarters are also ineligible for the scheme, such as houseboats and motor homes.
You have 12 months to buy a home
After your contributions are released, you have 12 months to purchase your own home or sign a contract to build. When you do so, you must notify the ATO within 28 days.
If you don't meet this requirement, you can re-contribute the funds to your super fund or take a one-year extension. Alternatively, you can keep the money and pay an additional 20% tax on the amount released through the scheme.
Pros of the First Home Super Saver scheme
- You can save thousands in tax
- You and your partner can both utilise the FHSS towards the same house, rolling the funds into the same deposit
- FHSS funds earn at the SIC rate, which may be more than you can earn through a savings account or term deposit
- The amount you can withdraw isn't affected by falling markets (so long as there's enough to withdraw)
- After withdrawal, you have up to 12 months to purchase a home with the funds (can be extended by another 12 months)
Cons of the First Home Super Saver scheme
- The scheme is subject to legislative changes - the rules may change from one year to the next
- By salary-sacrificing, you'll have less take-home pay
- It can be a slow process. The ATO states that, in most cases, super funds take 15 to 25 business days release your contributed cash - enough time to potentially miss out on your dream home!
- You have to pay a 20% FHSS tax if you sign a contract to buy or build more than 14 days before you request the release of your FHSS amounts
- The maximum of $50,000 a single person can contribute may not be enough to cover a deposit if you want to avoid Lenders' Mortgage Insurance (LMI). Unless you find a property going for less than $250,000, then $50,000 won't be enough to see you boasting a loan-to-value (LVR) ratio below 80%
- Returns are restricted to the SIC rate, which could be low compared to the performance of a balanced super fund
- If you owe money to the ATO or another Commonwealth agency, your FHSS release amount may be offset against this debt. That may be the case even if the offset reduces your requested withdrawal to zero
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
Lender Home Loan Interest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Extra Repayments Split Loan Option Tags Features Link Compare Promoted Product Disclosure
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