Save Your First Home Deposit Faster with the First Home Super Saver Scheme

Saving for a first home deposit can feel like the hardest part of buying a property. The good news is that the First Home Super Saver (FHSS) Scheme may help eligible first home buyers save a deposit faster using superannuation. By taking advantage of lower tax rates inside super, the FHSS scheme can help accelerate your savings compared to a standard savings account.

Save your first home deposit faster by using the First Home Super Saver Scheme.

Here’s how the First Home Super Saver Scheme works, step by step.

Step 1 – Check Your Eligibility First

• Before making any FHSS contributions, confirm that you are eligible.

• You must also be eligible at the time you apply for an FHSS Determination through the ATO to request the release of funds to purchase a home.

• It’s also important to check with your super fund that they participate in the First Home Super Saver Scheme, and understand any fees, charges, or insurance impacts that may apply.

Doing this early helps first home buyers avoid issues later.

Step 2 – Set Up Voluntary Super Contributions

Only voluntary contributions count toward the FHSS scheme. These can be made in two ways:

• Before-tax contributions (salary sacrifice): Ask your employer to direct part of your salary into super.

• After-tax personal contributions: Transfer money directly into your super fund. You may lodge a Notice of Intent to Claim to have these treated as before-tax.

Employer compulsory super guarantee contributions do not count toward your first home deposit savings under FHSS.

Step 3 – Make Contributions Toward Your First Home Deposit

You can contribute up to $15,000 per financial year, with a total FHSS cap of $50,000 across all years.

Your super fund automatically reports your voluntary contributions to the ATO.

Step 4 – Let Your Super Savings Grow

One major advantage of using super for your first home deposit is tax efficiency.

• Contributions are generally taxed at lower rates than personal income tax rates.

• Your savings may grow faster inside super compared to a standard savings account.

This can help first home buyers reach their deposit goal sooner.

Step 5 – Apply to the ATO for FHSS Release

When you’re ready to buy your first home, you apply through the ATO to release your FHSS savings, which include eligible contributions plus deemed earnings.

The ATO will issue a release authority to your super fund.

Step 6 – Receive Your FHSS Funds

FHSS funds are paid directly to you, not to the property seller, and can be used toward your first home deposit.

When the FHSS amount is released, tax is withheld before payment. The ATO calculates withholding tax as either:

• Your marginal tax rate plus Medicare levy, less a 30% offset, or

• 17% if your marginal rate can’t be estimated, or

• Your nominated FHSS withholding rate (capped at 17%).

This ensures your FHSS withdrawal is taxed fairly.

Step 7 – Buy and Live in Your First Home

If you use the FHSS Scheme, you must genuinely intend to live in the property as soon as practical after purchase and occupy it for at least 6 of the first 12 months.

You cannot use FHSS funds to buy:

• Vacant land (unless a build contract is signed within 12 months or an approved extension applies)

• Properties that cannot be lived in

• Houseboats or motor homes

Important: Apply for your FHSS release before signing the contract, or within 14 days after signing.

Final Thoughts

The First Home Super Saver Scheme isn’t suitable for everyone, but for many Australian first home buyers, it can significantly reduce the time needed to save a home deposit.

Understanding how to use superannuation strategically could shave months, or even years off your first home buying journey.

Disclaimer:

The information provided on this website is for general information and educational purposes only. It does not take into account your personal objectives, financial situation, or needs, and should not be relied upon as financial, legal, or tax advice. While we strive to ensure the content is accurate and up to date, we make no guarantees of its completeness, reliability, or suitability. Any reliance you place on the information is strictly at your own risk. We recommend that you seek independent professional advice before making any financial decisions, including from a licensed mortgage broker, financial adviser, or tax professional. References to government schemes, grants, or lender products are subject to change and eligibility criteria. Please confirm details with the relevant authority or provider. We are not responsible for any loss, liability, or damage incurred as a result of the use of this website or its content.