First Home Super Saver Scheme

First Home Super Saver Scheme

Saving enough money for a home deposit can be a huge challenge. But did you know you can use your super to help you save for your first home deposit faster?

If you don’t, you’re in the right place.

The First Home Super Saver Scheme, AKA ‘FHSSS’ has been designed to help you save for your first home deposit faster by taking advantage of tax savings you can get through super.

How will this scheme help you save?

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Faster savings

The potential tax savings could be higher than the interest you could get from a savings account. Plus, with your money held safely in super, there’s no chance on you spending that money somewhere else.

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Reduced tax bill

If you choose to save via salary sacrificing into your super, you’re lowering your taxable income. Meaning a larger tax return come tax time!

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If you end up deciding not to buy a home, you can leave the money in your super account and grow your savings for retirement.

How does it work?

To use the FHSSS, you need to make voluntary contributions to your super account each year. These could be before or after-tax contributions, but there are restrictions on which contributions can be used – more on that later!

Once you’re ready to buy your first home, you can apply to the ATO to withdraw those extra contributions. Once your application is approved, the ATO tells us to release eligible money, plus any deemed associated earnings, into your bank account.

You’ll then generally have a year from when you receive your savings to sign a contract to buy, or build, your first home.

Don’t worry though, if you don’t sign a contract to build or buy a home within one year of withdrawing your money, you can extend the timeframe for up to 12 months. If not, you can choose to either transfer the money back into your super (minus any tax) or keep the money and pay any tax you saved as part of the scheme.

How much can I withdraw?

Great question, this all depends on how much money you add to your super over the years.

You can make voluntary contributions towards this scheme of up to $15,000 per year until you reach $50,000.

If you've added $50,000, the maximum you can withdraw is $50,000. If you contributed less, you’ll be able to withdraw less. This amount is per person, so if you’re in a couple and are both doing the scheme, you can withdraw up to $50,000 each, so $100,000 combined.

One thing to note, any before-tax contributions are taxed at 15% before they’re released, which in case you didn’t know, is much lower than most people's income tax rate. But, you’ll also get any deemed associated earnings in addition to your funds. These earnings are calculated using a rate set by the ATO.

If you want to understand more about the associated earnings, head over to the ATO website.

Things to consider

Before you start making any contributions, check that you’re eligible for the FHSSS. To be eligible you must:

  • be 18 years or over

  • have never owned a property in Australia before

  • be buying a residential property in Australia, which is not a houseboat, a motor home, or vacant land

  • intend to live in the property you’re buying as your primary residence for at least 6 months

  • have not withdrawn any funds as part of the FHSSS before

You can read through the full eligibility requirements on the ATO website.

There are also some other things you should consider before deciding this is right for you.

Your usual contributions caps apply when adding money to your super, so make sure you’re aware of those so you don’t pay any extra tax.

You can only use salary sacrifice contributions, after-tax contributions, and personal deductible contributions (which is when you claim a tax deduction on an after-tax contribution) towards the FHSSS. You can’t use any other contributions, such as employer, spouse, or government contributions towards this scheme.

For more information on the FHSSS, visit the ATO website.

Page last updated 1 December 2023