First home super saver scheme
What is the first home super saver scheme?
The first home super saver scheme (FHSS) enables eligible first-time home-buyers to save for a deposit in super. Under the scheme, you could withdraw up to $50,000 of eligible contributions (or $100,000 for couples), less any contributions tax applicable, plus associated earnings1 to help purchase your new home.
Most people still need savings outside of the scheme, but by saving within superannuation, the FHSS can help you save money on tax.
How it works
- Make voluntary contributions to your super (either before tax or after tax). For the purposes of this scheme, you can only contribute up to $15,000 in any one financial year and a total of $50,000 across multiple years.2
- When you’re ready to buy, apply for an FHSS determination from the Australian Taxation Office (ATO) through myGov. The ATO will let you know how much you’re eligible to withdraw and the tax applicable.
- Once you’ve received your determination, apply to the ATO to release your savings. This is known as a ‘request for release’. The ATO will then instruct your super fund to release the amount for which you’re eligible. Note that your super fund releases this money to the ATO and not directly to you. The ATO then deducts the applicable tax and any outstanding debts you may have with the ATO or another Commonwealth Government agency, and sends the remaining funds to you. This step can take 15–25 days to complete, so keep that in mind when you’re house hunting.
You’ll have 12 months from the date of your ‘request for release’ to buy or build your first home. You will need to notify the ATO via myGov within 28 days after you have signed a contract to purchase or construct your home, otherwise you may be subject to FHSS tax.
1 The ATO calculates a notional earnings amount based on the Shortfall Interest Charge (SIC) rate
2 Contributions prior to 1 July 2017 are not eligible.
Super saver scheme example
Charlie earns a gross salary of $100,000 and commits to saving $200 per week for their first home deposit. They can do this either outside or inside of super.
| Saving outside super | Saving inside super using salary sacrifice |
|---|---|
| Gross amount: $200 per week | Gross amount: $200 per week |
| Marginal tax plus Medicare levy (32%): $64 | Contributions tax (15%): $30 |
| Net savings: $136 | Net savings: $170 |
| Net annual savings: $7,072 | Net annual savings: $8,840 |
By saving inside super, Charlie saves an extra $1,768 each year for their first home deposit.
Note that Charlie’s marginal tax rate (with a 30% offset) will apply to any earnings released under the super saver scheme.
It’s important to note that while Charlie saves extra in super, they can only withdraw and use these savings to purchase their first home. So, if Charlie changes their mind and decides to travel instead, any money saved in super will be inaccessible (generally, until a condition of release has been met).
How much could I release from my super?
Am I eligible?
What are eligible contributions?
How will I be taxed?
What if I can’t find a home to buy in time?
Boost your super before tax
The important stuff
Things you need to know:
- You can only access your super funds under the FHSS scheme once, even if you didn’t withdraw the maximum amount the first time.
- The contributions you make to super will count towards your concessional or non-concessional contributions cap4 (depending on the type you choose to make). It’s important that you don’t exceed your caps; otherwise, you may have to pay a penalty tax amount.
- The property you purchase must be residential — under the scheme, this does not include a houseboat or mobile home. It may include vacant land if you’re going to build on it, but the land must be capable of being occupied as a residence.
- The ATO will apply the FHSS determination based on a first-in-first-out rule. That means the order of the contributions you make to your super may affect the maximum amount you’re eligible to receive. Visit the ATO website for more detail.
- Investment earnings on your FHSS amount are deemed by the ATO and not based on the actual performance of your super fund.
4 Annual contribution limits apply to both before-tax (concessional) and after-tax (non-concessional contributions made to your super. For more information, see our fact sheet Opportunities and limits for super contributions.
