Understanding the FHSSS Scheme

Understanding the FHSSS Scheme

Quick Look
• Focus: How the First Home Super Saver Scheme (FHSSS) helps you save for a home deposit using super
• Key Takeaways:

  1. The FHSSS allows eligible Australians to save for a first home using the low-tax super system

  2. You can withdraw up to $50,000 of voluntary contributions plus associated earnings

  3. It’s tax-effective, but there are important limits, rules, and timelines to follow
    • Reading Time: ≈ 6 minutes

Introduction
Buying your first home in Australia is tough — especially with rising prices and deposit hurdles. That’s where the First Home Super Saver Scheme (FHSSS) comes in.

It’s a government program designed to help first home buyers grow their deposit faster by saving through their superannuation account, where the tax treatment is generally more favourable. If you’re eligible and use it correctly, the FHSSS can give you a real head start.

Context & Problem

Getting onto the property ladder has become harder over the last decade. In major cities, a 20% deposit can easily top $100,000 — far more than most people can stash away quickly in a regular savings account.

Traditional savings accounts offer minimal interest, and after tax, that growth is even less. But super is taxed at a concessional rate — just 15% on earnings and concessional contributions (ATO). The FHSSS lets you tap into this system to boost your home deposit savings.

However, the scheme has strict rules, contribution limits, and withdrawal conditions. Not understanding these could lead to delays, missed opportunities, or unexpected tax outcomes.

Strategy & How To

What is the FHSSS?

The FHSSS allows you to make voluntary contributions into your super fund and later withdraw them — along with deemed earnings — to put toward a first home deposit.

Who can use it?

To be eligible, you must:

  • Be 18 or older

  • Have never owned property in Australia (exceptions may apply for financial hardship)

  • Intend to live in the home for at least 6 months within the first year

  • Not have previously accessed FHSSS funds

How much can you contribute and withdraw?

  • Contribution caps:

    • Up to $15,000 in voluntary contributions can count towards the FHSSS per financial year

    • A total of up to $50,000 per person can be released (up from $30,000, updated July 2022)

  • Contributions must be voluntary, meaning:

    • Concessional (e.g. salary sacrifice or personal deductible contributions)

    • Non-concessional (after-tax contributions)

    • Employer SG contributions don’t count

How are funds taxed?

  • When you withdraw the funds, they are taxed at your marginal rate minus a 30% offset

  • This usually means a lower overall tax hit compared to saving through a bank account

How to access the money

  1. Make eligible voluntary contributions over one or more years

  2. Apply to the ATO for an FHSSS determination

  3. Then request a release of funds (can take up to 25 business days)

  4. You have 12 months from release to sign a home contract (or apply for a 12-month extension)

Example

Jasmine earns $80,000 and salary sacrifices $10,000 into super in one financial year for the FHSSS.

  • Super contributions tax (15%) = $1,500

  • Remaining = $8,500

  • Assuming ~$500 in earnings, the total releasable amount = ~$9,000

  • Taxed at marginal rate (32.5%) minus 30% offset = ~2.5% effective tax on withdrawal

Result: Jasmine may save thousands more using FHSSS than in a standard bank account

Case Study

Ben and Priya, both age 29, saving for their first home together

  • Each makes $12,000/year in salary sacrifice contributions over two years

  • Total eligible for FHSSS: $24,000 each

  • With earnings added, each releases ~$25,500

  • Total first home deposit: ~$51,000

They use the funds within 12 months to settle on a townhouse in regional NSW.

Common Questions & Misconceptions

“Do I have to use my employer super to do this?”
No. You’re only using your super fund as a savings vehicle. It’s your voluntary contributions that count, not the compulsory employer ones.

“What if I change my mind or can’t buy a house?”
If you don’t sign a home contract within 12 months (plus any extension), you must either re-contribute the money to super or pay extra tax (currently 20% of the assessable amount).

“Can I use the FHSSS more than once?”
No. You can only access the scheme once, even if you don’t use the full $50,000 limit.

“Can couples both use the scheme?”
Yes — each eligible person can access up to $50,000. That means a couple could potentially release up to $100,000 in total.

“What if I already own an investment property?”
You’re generally ineligible if you’ve ever owned property in Australia — including investment property, vacant land, or commercial premises.

Conclusion
The First Home Super Saver Scheme can be a smart way to boost your deposit — especially if you plan ahead. By using the lower-tax environment of super, many first-time buyers can save faster and more efficiently.

But like any government scheme, it’s important to understand the fine print. If the FHSSS sounds like it might suit your situation, it’s worth speaking with a professional to help you structure it correctly.

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Disclosure: General information only. Consider your objectives, financial situation and needs, and seek professional advice before acting.

How We Keep It Trustworthy
Every article includes a Review & Fact Check section below — so you know exactly where our facts come from, what’s uncertain, and whether there’s any bias.

Review & Fact Check

  1. Fact References
    • FHSSS contribution and release limits – Australian Taxation Office (ato.gov.au), updated July 2022
    • Tax treatment of FHSSS withdrawals – Australian Taxation Office (ato.gov.au)
    • Eligibility criteria – ATO and MoneySmart (moneysmart.gov.au)

  2. Unverified or Inconclusive Items
    • Earnings estimate in Jasmine’s example – based on typical assumptions, not a guaranteed return
    • Case study of Ben and Priya – illustrative only

  3. Time Sensitivity
    • Contribution caps, release limits, and tax rules may change — check current ATO guidelines

  4. Bias Assessment
    • Content is educational and factual
    • Light promotion of MoneyGPS and Planning IQ noted, clearly separated from the main article content

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hero-featured Property
dateicon 19th May 2025
timeicon 6 min

Understanding the FHSSS Scheme

Buying your first home in Australia can feel out of reach—but this scheme could help you fast-track your deposit using the tax advantages of super. Let’s break it down.

What is the FHSSS?

The First Home Super Saver Scheme allows eligible Australians to make voluntary contributions into their super and then withdraw those savings—plus earnings—to put toward a home deposit. Why does this matter? Because super is generally taxed at a much lower rate than your regular income or savings account earnings. You can withdraw up to $50,000 of your voluntary contributions—not including your employer’s compulsory contributions—making it a very tax-effective way to grow your deposit.

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Who’s Eligible?

To use the scheme, you must:

  • Be 18 years or older
  • Have never owned property in Australia (though there are exceptions for hardship)
  • Plan to live in the home for at least 6 months in the first 12 months
  • Not have previously accessed FHSSS funds

And remember—this is a one-time opportunity. Once you use the FHSSS, you can’t access it again.

How Much Can You Contribute and Withdraw?

Here’s how the numbers stack up:

  • You can contribute up to $15,000 per year in eligible voluntary contributions
  • And you can withdraw a maximum of $50,000 total
  • Contributions may be either concessional (like salary sacrifice) or non-concessional(after-tax), but not employer SG contributions which means you can only access the extra amount you nominate as contributed for this
  • When you withdraw the money, the ATO applies your marginal tax rate minus a 30%offset, which can mean a much lower tax bill compared to regular savings.

Strategy & How To

Real Examples
Let’s look at Jasmine.

She earns $80,000 and salary sacrifices $10,000 into her super. After the 15% super contributions tax, she has $8,500remaining. Add assumed earnings of around $500—and her total releasable amount is roughly $9,000.

Her effective tax on withdrawal? Just 2.5%. That’s a huge saving compared to a standard bank account.

Or take Ben and  Priya — a couple who each contribute $12,000 a year for two years. After earnings, they each withdraw about $25,500—giving them a combined deposit of over$50,000.

Strategy & Next Steps

The FHSSS is a powerful tool—but only if you understand the rules, timelines, and how to use it correctly.

If you’re considering it, now’s the time to plan your contributions and apply through the ATO for a determination before making any moves.

Personalised Support

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Closing

The First Home Super Saver Scheme can genuinely change the game for first home buyers—but only if you understand how to play it smart.

Disclaimer: Super Advice AI provides general financial information and does not consider your personal objectives, financial situation, or needs. Please consult a qualified financial advisor or sign up for our partner’s affordable automated advice plan to receive personal advice tailored to your needs.

With that all said, please like, subscribe and comment to help the YouTube algorithm show this video to others who might also benefit from our content.

Thanks for watching—and good luck with your first home journey!

Common Questions

Do I have to use my employer ’ s super?

No. You’re using your voluntary contributions—not employer payments. But you can make your additional contributions to the same super fund–just make sure you advise the fund at the end of each financial year using the right form.

What if I change my mind?

Can couples both use it?

What if I’ve owned investment property?

Conclusion

The First Home Super Saver Scheme can be a smart way to boost your deposit — especially if you plan ahead. By using the lower-tax environment of super, many first-time buyers can save faster and more efficiently.

But like any government scheme, it’s important to understand the fine print. If the FHSSS sounds like it might suit your situation, it’s worth speaking with a professional to help you structure it correctly.

Thinking about contributing to super from your pre-tax salary?

Money GPS helps you understand how salary sacrifice could improve your long-term position, including:

  • How much you can afford to contribute
  • The potential tax savings and retirement benefits
  • Financial modelling based on your actual figures

Available online for $198. Start free and access the advice when you’re ready.

Need Full Scope Financial Planning?

If you think you might need a holistic roadmap that leaves nothing out, consider booking a discovery meeting with a fully licensed Financial Planner.

  • Work one on one with the Planner
  • Get ongoing support through every stage of your financial journey

Book a discovery call with Planning IQ today and take the first confident step towards comprehensive wealth management.

Disclosure: General information only. Consider your objectives, financial situation and needs, and seek professional advice before acting.

How We Keep It Trustworthy
Every article includes a Review & Fact Check section below — so you know exactly where our facts come from, what’s uncertain, and whether there’s any bias.

Need help making smarter financial decisions? Try our AI-powered financial check-up today!

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