The first home super saver scheme is the most underused first home buyer measure in Australia, largely because people assume super is locked away until retirement.
The first home super saver scheme allows first home buyers to salary sacrifice or make personal contributions into super, up to $15,000 a year and $50,000 in total, then withdraw those amounts plus deemed earnings for a deposit. The tax treatment is the advantage, not the investment return.
The first home super saver scheme lets you make voluntary contributions into super, then withdraw them plus deemed earnings to fund a deposit. Because those contributions are taxed more lightly, you reach your target faster than saving the same money in a bank account.
The first home super saver scheme allows first home buyers to salary sacrifice or make personal contributions into super, up to $15,000 a year and $50,000 in total, then withdraw those amounts plus deemed earnings for a deposit. The tax treatment is the advantage, not the investment return.
Most buyers dismiss it because the paperwork looks complicated. Three years of salary sacrifice can put an extra ten thousand dollars in your pocket compared with the same savings sitting in a bank account.
The first home super saver scheme headline number is $50,000, but what you actually receive differs.
The fhsss withdrawal limit counts one hundred percent of eligible after-tax contributions and only eighty five percent of before-tax contributions, because those were already taxed at fifteen percent inside the fund. Deemed earnings are then added on top, so a total release can exceed $50,000.
A realistic three year first home super saver scheme plan on a salary sacrifice basis.
After three years that is $38,250 in net contributions, plus deemed earnings. A withdrawal at that point commonly lands somewhere around $40,000 to $42,000.
The first home super saver scheme advantage is tax, not investment performance.
Salary sacrificed contributions are taxed at fifteen percent inside super rather than at your marginal rate. For someone on a higher marginal rate, using super for house deposit saving means considerably more of each dollar survives the journey.
The higher your marginal rate, the stronger the case. On lower incomes the benefit narrows considerably.
The first home super saver scheme requirements are straightforward, with one timing trap.
First home super saver eligibility is lost the moment a property settles in your name without a prior determination. This is the single most common way people forfeit the benefit.
Timing matters more than paperwork in the first home super saver scheme, so start early.
You then have twelve months from the release date to settle. Apply six to eight weeks before you need the money.
The first home super saver scheme sits inside your normal super caps rather than beside them.
Your employer contributions consume part of the concessional cap before you start. If your employer pays $12,000 and the general concessional cap is $30,000, you have $18,000 of headroom, but only $15,000 of it can count toward the scheme in a single year. That cap rises to $32,500 from 1 July 2026.
Two people using the first home super saver scheme separately doubles the benefit on one property, which our home loans Sydney team factors into your deposit plan.
The first home super saver scheme does not suit everyone, and the honest answer matters here.
Each of these forfeits money or the benefit entirely.
Yes, through the first home super saver scheme. You make voluntary contributions of up to $15,000 a year, capped at $50,000 in total, and later withdraw those amounts plus deemed earnings for a deposit on your first home.
Up to $50,000 of eligible contributions per person, plus deemed earnings, so the total release can exceed $50,000. Concessional contributions count at eighty five percent while after-tax contributions count at one hundred percent.
Around two to three weeks for the determination, then one to two weeks for the release once requested. Apply six to eight weeks before you need the funds, and note you must have a determination before any property transfers to you.
It depends on your marginal tax rate and timeframe. On a higher rate with three or more years to save, the tax advantage is substantial. On a low rate, or if you plan to buy within a year, the benefit is modest relative to the effort.
Yes. Each person has a separate $50,000 lifetime cap, so a couple can access up to $100,000 combined. Both must individually meet the eligibility requirements and request their own determination and release.
No. Only voluntary contributions made from 1 July 2017 onward are eligible, whether salary sacrificed or made personally after tax. Compulsory employer contributions are excluded entirely.
If you have already received a release you must sign a contract within twelve months or recontribute the amount to super, otherwise additional tax applies. If you never request a release, the money simply stays in super until retirement.
Yes. Funds released can form part of the five percent deposit required under the guarantee. The two schemes have separate eligibility rules, so qualifying for one does not automatically qualify you for the other.
The first home super saver scheme works best when the withdrawal timing lines up with your purchase. Getting that sequence right is where it goes wrong for most people.
This guide was reviewed by Paritosh Wadhwani, Director and principal broker at APW Finance Pty Ltd, Bella Vista NSW. Paritosh structures residential, commercial, SMSF and self-employed lending for clients across Sydney and the Hills District.
APW Finance Pty Ltd delivers expert lending solutions with personalised service, empowering clients across residential, commercial, and business sectors.