Summary
The First Home Super Saver (FHSS) Scheme allows eligible first home buyers to make voluntary contributions to their superannuation fund and later withdraw up to $50,000 to use toward a first home deposit — the core advantage is tax: concessional (pre-tax) contributions inside super are taxed at 15%, which for most workers is significantly lower than their marginal income tax rate; a couple can each access up to $50,000, combining for up to $100,000 toward a deposit; voluntary contributions from 1 July 2017 onwards count toward the scheme
You can contribute up to $15,000 per financial year and a total of $50,000 across all years — the $15,000 annual cap and $50,000 lifetime cap are firm limits; contributing more than these amounts does not increase your FHSS release amount; the caps apply to the eligible voluntary contributions (concessional and non-concessional), not to your employer’s compulsory Super Guarantee (SG) contributions, which are never eligible for FHSS release
You must request an FHSS determination from the ATO before the property transfers to you — a September 2024 rule change requires a valid FHSS determination before settlement (not just before signing the contract); once you sign a contract, notify the ATO within 90 days; FHSS is a one-time benefit — you have one lifetime release per person; plan and time your contributions and withdrawal carefully
What is the FHSS Scheme?
The First Home Super Saver (FHSS) Scheme is an Australian Government program administered by the Australian Taxation Office (ATO) that allows eligible first home buyers to use their superannuation as a dedicated savings vehicle for a home deposit.
The scheme has been running since contributions became eligible from 1 July 2017. The withdrawal cap was increased to $50,000 per person in July 2022, making the scheme significantly more useful for buyers in high-cost markets.
The core principle: Instead of saving in a bank account where you have already paid income tax on your take-home salary, you contribute into superannuation where concessional (pre-tax) contributions are taxed at only 15%. For a worker on $90,000, that is 17 percentage points less than their marginal rate. Over several years, this tax saving compounds into a meaningfully larger deposit.
You do not need to be an Australian citizen or tax resident to use the FHSS scheme — it is available to eligible individuals regardless of citizenship or residency status.
How does the FHSS Scheme work?
Step 1 — Make voluntary contributions to your super
To build your FHSS savings, you make voluntary contributions to your super fund on top of your employer’s compulsory Super Guarantee (SG) contributions. There are two types of eligible voluntary contributions:
Concessional contributions (pre-tax):
- Salary sacrifice — your employer diverts part of your pre-tax salary into super
- Personal deductible contributions — you contribute from your own bank account and claim a tax deduction
Concessional contributions are taxed at 15% inside super — instead of at your marginal rate.
Non-concessional contributions (after-tax):
- You contribute from your own bank account, after tax has already been paid
- These do not receive the same tax benefit on the way in — but the associated earnings inside super grow at the concessional rate
SG (employer) contributions are not eligible — only voluntary contributions count toward FHSS.
Step 2 — Contributions grow inside super
While your voluntary contributions sit in your super fund, they earn returns. However, when you eventually withdraw under FHSS, the ATO does not use your fund’s actual returns. Instead, it applies a deemed earnings rate — the ATO’s Shortfall Interest Charge (SIC) rate, currently approximately 6.85% per annum — to calculate the “associated earnings” component of your FHSS release amount. If your fund earns more than 6.85%, the extra stays in your super for retirement.
Step 3 — Request an FHSS determination from the ATO
When you are ready to buy, you must apply to the ATO for an FHSS determination — a formal assessment of how much you are eligible to release. The ATO assessment takes approximately 2-3 weeks.
Critical timing rule (updated September 2024): You must have a valid FHSS determination before property ownership transfers to you — i.e. before settlement. This is a stricter requirement than the previous rule, which only required the determination before signing the contract.
Steps:
- Apply for FHSS determination at ato.gov.au (myGov)
- Receive your maximum release amount (allow 2-3 weeks)
- Sign a contract to purchase your first home
- Notify the ATO of the contract within 90 days of signing
- Request release of FHSS funds from your super fund
- Use the released funds toward your deposit
Step 4 — Funds are released and taxed on withdrawal
When your FHSS funds are released, the assessable portion (concessional contributions and associated earnings) is included in your taxable income for that year — but you receive a 30% tax offset on the assessable amount. This significantly reduces the tax payable on withdrawal.
Non-concessional contributions are returned tax-free (you already paid tax on them).
Example — $45,000 FHSS withdrawal (full concessional):
- Assessable amount: $45,000
- 30% tax offset applied
- Net tax rate on withdrawal depends on your total income for the year — but the offset makes it significantly less than your marginal rate
Contribution limits
| Limit | Amount |
|---|---|
| Annual cap | $15,000 per financial year |
| Lifetime cap | $50,000 per person |
| Couple combined | Up to $100,000 |
The $15,000 annual cap is from eligible voluntary contributions — not from employer SG. The $50,000 lifetime cap is per person, not per property. For couples buying together, each person can access up to their own $50,000.
The annual cap and the concessional contributions cap interact: Your employer’s SG contributions count toward the concessional cap (currently $32,500 in 2026-27). If your employer contributes $12,000 in SG, you have $20,500 of concessional headroom — but the FHSS annual cap of $15,000 applies first, so your effective FHSS-eligible voluntary concessional contributions are capped at $15,000 per year regardless.
Eligibility
To use the FHSS Scheme, you must:
- Be 18 years or older at the time of requesting the FHSS determination
- Have never previously owned property in Australia (see exception below)
- Be buying or building a home you intend to live in — investment properties are not eligible
- Not have previously requested an FHSS amount to be released from your super
- Intend to live in the property for at least 6 of the first 12 months that it is practicable to occupy it
The property must be:
- Residential property located in Australia
- Land on which you will build a residential property
You do not need to be:
- An Australian citizen or permanent resident — the scheme is open to all eligible individuals
- Currently living in Australia
Previous property owners — limited exception
Some people who have previously owned property in Australia may still be eligible if they have suffered a financial hardship — for example, if they have permanently lost their previous home through circumstances outside their control. The ATO assesses these applications case by case.
Tax — how the FHSS scheme saves money
The key tax advantages:
On the way in (concessional contributions):
- Taxed at 15% inside super
- For a worker on $70,000 (marginal rate 30%): saving of 15 percentage points per dollar contributed
On the way out (withdrawal):
- Assessable amount (concessional contributions + deemed earnings) taxed at your marginal rate
- 30% tax offset applied to the assessable amount — significantly reducing the tax payable
- Non-concessional contributions returned tax-free
For a first home buyer on $90,000 income: Contributing $15,000/year for three years saves approximately $8,000-$12,000 in tax compared to saving the same amount in a standard bank account, according to FHSS scheme modelling published by Collings (July 2026).
FHSS and other first home buyer schemes
The FHSS Scheme can be used alongside other Australian Government first home buyer assistance:
| Scheme | What it provides | Combines with FHSS? |
|---|---|---|
| First Home Guarantee | Buy with 5% deposit, no LMI — 35,000 places/year | Yes |
| Family Home Guarantee | Single parents — 2% deposit, no LMI | Yes |
| First Home Owner Grant (FHOG) | State-based cash grants for new builds | Yes |
| Stamp duty concessions | State-based — varies by state | Yes |
Using FHSS to build your deposit, combined with the First Home Guarantee to buy with a smaller deposit and no LMI, and a state FHOG for a new build — can significantly reduce the total upfront cost of your first home.
Important rules and traps to avoid
One lifetime release only. You have one FHSS release per lifetime. Once you withdraw, you cannot use the scheme again — plan your timing and contribution level carefully before requesting a release.
Request the determination at the right time. You need a valid FHSS determination before settlement — not just before signing. Apply well in advance of when you expect to settle.
Track your contributions. The $15,000 annual cap and $50,000 lifetime cap apply only to eligible voluntary contributions. Contributions before 1 July 2017 do not count. Your employer’s SG contributions never count. Check your FHSS balance on myGov/ATO.
Withdrawn funds must be used for your home. If you withdraw FHSS funds and do not use them to buy or build a first home within the required timeframe (generally within 12 months of the first release), you may face a penalty tax.
Deemed earnings vs actual returns. Your FHSS release uses the ATO’s deemed earnings rate (currently ~6.85%), not your fund’s actual investment returns. If markets performed below 6.85%, you benefit. If they performed significantly above it, the extra stays in your super.
FAQs (frequently asked questions)
What is the FHSS Scheme?
A government program allowing eligible first home buyers to make voluntary super contributions and withdraw up to $50,000 (per person) toward a home deposit, benefiting from superannuation’s lower tax rates.
How much can I withdraw under FHSS?
Up to $50,000 per person — from eligible voluntary contributions made from 1 July 2017. A couple buying together can access up to $100,000 combined.
How much can I contribute per year?
Up to $15,000 of eligible voluntary contributions per financial year count toward your FHSS total.
Do employer super contributions count?
No — only voluntary contributions (salary sacrifice or personal deductible contributions) are eligible. Your employer’s compulsory SG contributions do not count.
Can I use FHSS if I’m not an Australian citizen?
Yes — the FHSS scheme is open to eligible individuals regardless of citizenship or residency status.
When do I need the FHSS determination?
Before property ownership transfers to you — i.e. before settlement. This changed in September 2024. Apply for the ATO determination well in advance of settlement.
Can I use FHSS more than once?
No — you have one FHSS lifetime release per person.
Can I use FHSS and the First Home Guarantee together?
Yes — the FHSS Scheme and the First Home Guarantee can be used together.
Related guides
- What is superannuation in Australia? →
- What is LMI (Lenders Mortgage Insurance)? →
- What is salary sacrifice in Australia? →
- What is a TFN in Australia? →
- What is PAYG in Australia? →
This guide is for general information only and does not constitute financial or tax advice. FHSS rules, caps and processes may change — always verify at ato.gov.au or consult a registered financial adviser or tax agent before making contribution decisions. Last updated September 2026.
Sources: ATO — About the FHSS scheme (ato.gov.au, July 8, 2026) | ATO — First home super saver scheme (ato.gov.au, July 8, 2026) | mozo.com.au — First Home Super Saver Scheme guide (August 25, 2026) | hudsonfinancialplanning.com.au — FHSS Scheme 2026 (March 31, 2026) | collings.com.au — First Home Super Saver Scheme 2026 (July 6, 2026) | fhssplanner.com.au — How FHSS works | supercalcpro.com.au — First Home Super Saver Scheme (June 27, 2026) | ryroloancentre.com.au — FHSS Complete Guide 2026 (April 29, 2026) | firsthomebuyers.gov.au — First Home Super Saver Scheme (official)
