The First Home Super Saver Scheme allows eligible first-home buyers save for a deposit through voluntary super contributions.
Up to $15,000 in eligible voluntary contributions per financial year and up to $50,000 in total can count toward FHSS.
Only voluntary contributions can be released under FHSS. Employer Super Guarantee contributions cannot be withdrawn.
FHSS may offer tax advantages, however contribution limits, release rules and occupancy requirements apply.
For some buyers, FHSS may work best as part of a broader deposit strategy rather than the full deposit solution.
Saving a deposit remains a key challenge for many first-home buyers in Australia.
With property prices high in many markets, building a deposit while paying rent and covering everyday living costs can take years. For many renters and young professionals, saving for a house deposit can feel slow and difficult.
To help address this challenge, the Australian Government introduced the First Home Super Saver Scheme (the FHSS scheme).
In this guide, we explain what the scheme is, how it works, who may be eligible, how much you may be able to save, the main pros and cons, and how FHSS compares with saving outside super.
Understanding how the scheme works, and whether it suits your financial situation is important before relying on it for your deposit.
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What is the First Home Super Saver Scheme?
The First Home Super Saver Scheme (or the FHSS Scheme) is an Australian Government initiative designed to help eligible first-home buyers save a deposit using the tax advantages of the superannuation system.
Introduced in 2017, the scheme allows eligible buyers to make voluntary super contributions and later apply to release those funds for a deposit.
Rather than relying only on a savings account, part of your deposit may be built within superannuation, where concessional tax treatment may apply.
Eligible participants may withdraw up to $50,000 in voluntary contributions, plus associated earnings calculated under FHSS rules. However, FHSS is designed to support only deposit savings.
You might also be interested in: First home buyer guide: Government grants and concessions
How the First Home Super Saver Scheme works
The FHSS scheme follows a structured process. You make eligible voluntary super contributions, ask the ATO how much you may be able to release, request the release, receive the funds, and then use them for an eligible first home purchase or build.
Step 1: Make eligible voluntary contributions.
Step 2: Get an FHSS determination and request release.
Step 3: The ATO processes and pays the funds.
Step 4: Buy or build an eligible home within the time limit.
1. Make eligible voluntary contributions.
To use the scheme, you first make eligible voluntary contributions to your super. These may be:
Concessional contributions, such as salary sacrifice or personal contributions later claimed as a tax deduction
Eligible non-concessional contributions made from after-tax income
Employer Super Guarantee contributions do not count and cannot be released under FHSS.
The scheme also has limits:
Up to $15,000 of eligible voluntary contributions can count per financial year
Up to $50,000 of eligible voluntary contributions can count in total
Associated earnings are calculated by the ATO
2. Get an FHSS determination and request release.
Once you have built eligible savings, ask the ATO for an FHSS determination. This shows the maximum amount that may be released based on your eligible contributions and associated earnings. You can then lodge an FHSS release request with the ATO. The ATO allows more than one determination before settlement, but only one active release request at a time.
3. The ATO processes and pays the funds.
After your release request is approved, the ATO sends a release authority to your super fund. Your fund sends the money to the ATO, and the ATO then withholds any required tax, may offset outstanding Commonwealth debts, and pays the remaining balance to you.
Because the process is not immediate starting early.
4. Buy or build an eligible home within the time limit.
After making a valid release request, you need to sign a contract to buy or build eligible residential property within 12 months. In some cases, the ATO may allow a further 12-month extension. You can use released FHSS funds to buy or build eligible residential property in Australia. Vacant land may qualify if it is part of an arrangement to build a home.
However, you must genuinely intend to live in the property and occupy it for at least 6 of the first 12 months after it is practicable to move in. If you miss the required timeframe, you may need to recontribute the amount to super or pay FHSS tax.
The key point is timing matters. FHSS may be useful when your savings, finance and purchase timelines are aligned.
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Who is eligible for the First Home Super Saver Scheme?
Eligibility for the First Home Super Saver Scheme (FHSS) is determined by the ATO's rules. In simple terms, you must be a genuine first-home buyer, meet the age requirement, intend to live in the property you buy, and not have previously made a valid FHSS release request.
You may be eligible for the FHSS scheme if you:
Are 18 years or older when you request an FHSS determination
Are a first-home buyer under the scheme rules
Have never owned property in Australia, including an investment property, vacant land, commercial property, certain leasehold interests or company title interests in land
Intend to live in the property you buy, rather than use it purely as an investment
Have not previously made a valid FHSS release request
What "first-home buyer" means under the scheme
Under the FHSS rules, being a first-home buyer generally means you have never held an ownership interest in Australian real property. This is broader than never having lived in a home you owned. It can also include previous ownership of:
An investment property
Vacant land
Commercial property
Certain leasehold interests
Company title interests in land
This is an important eligibility check, because some buyers assume prior ownership only counts if they lived in the property.
In some circumstances, a person who previously owned property may still be eligible under a financial hardship exception. This may apply if you lost ownership of all relevant property interests because of financial hardship and the Commissioner makes a hardship determination.
This is not automatic, and the ATO advises that you apply for a hardship determination before making contributions under the scheme.
Checking eligibility early can help you avoid making voluntary contributions based on the wrong assumption or building a deposit plan that does not align with the FHSS rules.
How much can you save using FHSS?
How much you may be able to access under the First Home Super Saver Scheme (FHSS) depends on how much you contribute, when you contribute it, and whether those contributions are concessional or non-concessional.
Under current ATO rules, up to $15,000 of eligible voluntary contributions per financial year can count toward the scheme, with a maximum of $50,000 across all years. When you apply for release, the ATO also adds an amount of associated earnings to work out your maximum releasable amount.
The following example shows how the cap works in practice. If a buyer contributes $15,000 in each of three financial years, their eligible contributions counted under the scheme would total $45,000 before associated earnings are added.
Contribution counted toward FHSS | |
|---|---|
Year 1 | $15,000 |
Year 2 | $15,000 |
Year 3 | $15,000 |
Total | $45,000 |
In this example, the buyer has not yet reached the $50,000 overall cap, so there may still be room for additional eligible contributions in a later year. When the buyer requests release, the ATO adds associated earnings, so the final amount available may be higher than the contribution total alone.
There is one detail that may be overlooked by some buyers. For release calculations, the ATO counts 100% of eligible non-concessional contributions but only 85% of eligible concessional contributions toward the FHSS maximum release amount. However, when testing the $15,000 annual cap and $50,000 overall cap, all voluntary contributions are assessed at their full value.
That distinction can affect how much you may actually receive. For some buyers, the final FHSS release amount will depend not just on how much they contribute, but on the mix of contribution types, their timing and their broader tax position. An Aussie Broker can help you understand how FHSS savings may fit into your wider deposit strategy and borrowing power. For tax and contribution questions, seek independent financial or tax advice.
What are the benefits and downsides of the FHSS scheme?
FHSS may help some buyers build deposit savings in a more structured way. Its main appeal is the ability to save through voluntary super contributions, which may receive more favourable tax treatment than savings held outside super. But the scheme also has limits, technical rules and timing requirements that may not suit every buyer.
At a glance: FHSS benefits and considerations
Benefits | Downsides |
|---|---|
May help build a deposit faster | Contribution limits apply |
Concessional contributions are generally taxed at 15% | May not cover a full deposit |
30% FHSS tax offset may apply on release | Rules and release steps can be complex |
Can support more disciplined saving | Release amount may differ from contributions made |
May work well as part of a deposit strategy | Super balances can rise or fall with markets |
Potential benefits of the FHSS scheme
It may help you build a deposit faster.
For many first-home buyers, the challenge is finding room to save while paying rent, bills and other living costs. The FHSS scheme creates a structured pathway by allowing eligible voluntary super contributions to count toward a future deposit release, with associated earnings added when the releasable amount is calculated.
For buyers who want a more disciplined savings framework, that structure may be useful.
Lower tax on some contributions may improve savings outcomes.
One of the main advantages of the FHSS scheme is the tax treatment of some contributions. Concessional contributions are generally taxed at 15% inside super, which may be lower than a person’s marginal tax rate.
That does not guarantee a better outcome for all buyers. However, for some people, it may mean more of each eligible contribution remains invested toward a deposit than if they saved from after-tax income in a standard account.
The ATO also applies a 30% FHSS tax offset to assessable released amounts.
It can support more disciplined saving.
Because FHSS savings are held inside super, they are separated from everyday spending money. For some buyers, that may make it easier to stay consistent and avoid dipping into deposit savings for other expenses.
Potential downsides to consider
The limits may not cover the full deposit required.
In higher-priced markets, the amount available under FHSS may not be enough to cover a full deposit on its own.
It also does not cover other upfront buying costs such as stamp duty, conveyancing fees and other purchase expenses. For that reason, the FHSS scheme may work better as one part of a broader deposit strategy rather than the entire plan.
The rules and process can be complex.
The FHSS scheme is governed by detailed ATO rules covering eligible contribution types, release timing, occupancy requirements and tax treatment. The rules and release process can be more complex than a standard savings account.
For example, the releasable amount may vary depending on the type of contribution and the method used to calculate associated earnings. That can make the final releas
e amount different from what some buyers expect.
Super investment values can rise or fall.
Savings held in super remain invested according to your fund settings, which means values can rise or fall over time. While the ATO adds an amount of associated earnings when calculating your FHSS release amount, that figure is determined under scheme rules. It is not simply a reflection of your actual super fund performance. This means the scheme may offer tax advantages, but it does not remove investment risk within super.
The FHSS scheme can be useful for some buyers, but it comes with trade-offs. The limits may be too low for some deposit goals, the rules can be more complex than a standard savings account, and the super environment adds another layer of administration and risk.
The key question is not whether the scheme is good or bad in general. It is whether it fits your income, timeline, deposit target and home-buying plans.
FHSS scheme vs saving outside super
The key decision is whether FHSS suits your deposit strategy compared to regular savings.
The main trade-off is straightforward. The FHSS scheme may offer tax advantages on eligible voluntary super contributions, but savings held outside super are generally easier to access and manage. For some buyers, the decision comes down to choosing between potential tax efficiency and day-to-day flexibility.
At a glance: FHSS vs regular savings
Saving method | Tax treatment | Flexibility |
|---|---|---|
Super through FHSS | Eligible concessional contributions are generally taxed at 15% inside super | Lower flexibility, with access subject to FHSS rules and release conditions |
Regular savings | Savings come from income already taxed at your marginal tax rate | Higher flexibility, with funds generally available when needed |
This comparison is a useful starting point, but it does not mean one option is automatically better. The best fit depends on your timeline, savings habits and how much access you want to your money before you buy.
When the FHSS scheme may suit you
The FHSS scheme may suit buyers who want a more structured way to save and are comfortable working within the scheme rules. It may be relevant if you:
Have the capacity to make eligible voluntary contributions over time
Want to take advantage of concessional tax treatment on some contributions
Prefer a more disciplined savings framework
Are comfortable with the release process and eligibility requirements
For some buyers, that can make it easier to separate deposit savings from everyday spending.
When regular savings may suit you
Saving outside super may suit buyers who want more simplicity and control. A regular savings account is easier to access. It is not subject to the same FHSS contribution, release and occupancy rules. This may be more suitable if you:
Want full access to your savings at short notice
Have an uncertain purchase timeline
Prefer a simpler savings process
Want funds available for deposit costs, moving expenses or a cash buffer
The trade-off is that savings outside super do not usually receive the same concessional tax treatment as eligible FHSS contributions.
Some buyers may use both
This does not always need to be an either-or decision. Some buyers may use the FHSS scheme for part of their deposit while also keeping savings outside super for flexibility, upfront costs or an emergency buffer. A blended approach may help balance:
Potential tax advantages through super
Easier access to cash outside the super
The FHSS contribution limits
The need for flexibility during the buying process
The clearest way to think about it is this: the FHSS scheme may help some buyers save more efficiently, while regular savings may offer more certainty and control. The better option depends on your income, deposit target, purchase timeline and how much flexibility you want before committing to a property purchase.
Is the First Home Super Saver Scheme right for you?
The First Home Super Saver Scheme can be a useful tool for some first-home buyers, but it is not a one-size-fits-all solution. It depends on your contribution capacity, timeline and deposit goals.
For some buyers, FHSS may offer a more structured and potentially more tax-effective way to build part of a deposit. For others, the contribution caps, release process and reduced flexibility may mean regular savings remain the simpler option. The key is to understand the rules early, plan the timing carefully and assess FHSS as part of your broader deposit strategy rather than in isolation.
If you’re weighing up how FHSS fits with your deposit target and borrowing power, an Aussie Broker can help you understand how it may work alongside your home loan options and next steps. Book a free^ chat with an Aussie Broker.