Buying your first home (with help from your super)

Saving for your first home can be tough. But back in 2017, to help first home buyers save, the government introduced the First Home Super Saver (FHSS) Scheme to make things a teeny bit easier. It involves using your superannuation fund as a vehicle to save for a deposit for your first home.  

Saving for a home hasn’t always been this difficult.  

In the 1980s, more than 60% of 25-34 year olds owned a home. But by 2025, this number dropped to 43%. It’s got a lot less to do with lattes and brunches than you might think – and a lot more to do with your parents, policies that have led to benefits for landlords, generational changes and market dynamics.

Before we dive into the details, here’s a quick summary. 

The First Home Super Saver (FHSS) Scheme allows eligible individuals to add money to super and then withdraw it, along with some earnings, when they buy a first home. There’s two main ways the FHSS scheme helps you to save for a home: 

• Super is taxed differently to your other income, so it can help you grow your savings. 

• Savings inside super are not accessible like a bank account, so this could help you stay on track. 

1. Check your eligibility 

2. Add money to your super from before-tax and/or after-tax income 

3. Stick to the limits that apply 

4. Understand how investment earnings are calculated 

5. Withdraw both your contributions and some earnings to use towards your first home 

Read on to understand how each of these steps works in practice. We have also provided a detailed example, to help you put all the steps together. 

Here’s who can access the FHSS Scheme. You must meet all these criteria. 

1. be a first home buyer 

2. either live in the premises immediately, or intend to live in the property for at least six months within your first year of ownership (provided it’s habitable) 

3. have never held a freehold interest in real property, a long-term lease of land in Australia or a company title interest in land in Australia (unless the ATO determine you’re in Financial Hardship). This includes a property you may have held jointly. 

4. never have requested a release under the FHSS Scheme; and  

5. be over 18 – to make the request (though you can start saving for it at any age).  

You’re all good. Your eligibility is assessed individually. This means that; 

1. If the other person has accessed the scheme before, it won’t affect your ability to apply. 

2. If the other person isn’t eligible for the scheme, you can still apply. 

3. If you both have eligible FHSS contributions, you can each apply separately, meaning together you could withdraw up to $100,000 plus associated earnings. 

Once you’ve checked you’re eligible, you can use your super as a low-tax savings plan to build a deposit towards your first home.  

You need to put the extra money into your super yourself. You can’t use the money your employer puts in.  

First step is to start making voluntary contributions into your super account. You can either set up a regular salary sacrifice payment from your pre-tax income though your employer or make after-tax contributions (via BPAY). The tax treatment of your contributions will differ when the time comes to make a withdrawal, depending on which way the money was added. 

Be aware that annual caps apply to both types of contributions.  

It’s on you to keep track of your personal contributions, and to share this info with the ATO.  

Because the ATO administers the scheme, they’ll decide if your contributions can be used under the FHSS scheme and what your maximum release amount is. You may need to provide evidence of your contributions before your super fund can release your FHSS dollars to you.  

It’s important to understand the limits that apply to contributions that can be released under the FHSS scheme. 

To work out how much of the annual limit ($15,000) and overall limit ($50,000) you’ve used, you need to assess all voluntary contributions in full. 

Example 

If you made the following contributions to your super within a financial year: 

• after-tax (BPAY) contribution to your super of $10,000 (non-concessional) 

• salary sacrifice contribution to your super of $10,000 (concessional) 

Only $15,000 of your contributions would be eligible to be counted as FHSS contributions. The remaining $5,000 would stay in your super until you are eligible to withdraw it (such as when you retire). 

There are also contribution limits that apply to super, that you must adhere to. 

Keep these limits in mind when using the FHSS Scheme to save.  

Example 

If your employer contributions to super were $20,000 per financial year, you can only add $10,000 each year as a concessional contribution. Any extra may get hit with higher tax. 

But you can still use the full $15,000 annual FHSS contribution limit by making an extra after-tax (non-concessional) contribution of $5,000. 

Under the First Home Super Saver (FHSS) Scheme, the ATO calculates your earnings on eligible contributions at a notional (deemed) rate, NOT on the actual investment performance of your super. This could mean that your super investments might grow more quickly or more slowly than the ATO’s calculation. No matter which super fund you are with, the earnings rate that the ATO applies will be the same – based on the date of the contribution and withdrawal. 

Wanna see how that looks? The ATO calculates current notional earnings rates using 'shortfall interest charge’ (SIC) rates.

• Dive into SIC rates. 

Between July 2017 and December 2025, the SIC rates have ranged between 3.01% (lowest) to 7.42% (highest).  

 When you’ve saved up enough and found the home of your dreams, you can apply for a determination, and then a release, of your FHSS contributions as well as some associated earnings. You just need to notify the ATO and your super fund. 

• Access your MyGov account and The Australian Tax Office to request a FHSS Scheme determination. 

• Receive information from the ATO that will confirm how much can be released to you under the scheme. 

A FHSS Scheme Determination looks at the total voluntary contributions you’ve made plus the associated earnings, within the relevant time period. You can request a determination on more than one occasion, to be sure of how much you have saved, or to provide documentation to your lender (if required).  

Note: a determination is not a request to release funds. 

Before taking the plunge, make sure: 

• You’ve made all the voluntary contributions you want to make; 

• Your FHSS determination is correct; and  

• You’ve signed, or are ready to sign, a contract to buy or build your first home. 

Note: If your request is cancelled for any reason (including if the personal contributions info you provided was inaccurate), you will not be able to apply again in the future.  

The ATO will check whether the contributions you told them about are eligible by cross-checking them against the figures reported by your super fund. 

• See – Keeping track of your voluntary contributions in step 2 

You have 12 months after the date of your FHSS release request to sign a contract to purchase or build a home. If for some reason this doesn’t work out within 12 months (because life happens), you can be granted an extension of another 12 months (up to 24 months total), or you can return the funds to your super account.   

Keeping FHSS amounts, without purchasing a property will result in being charged the FHSS tax, which is 20% of your assessable FHSS released amounts. 

The ATO will issue a release authority to your super fund and request they send the FHSS amounts to the ATO. The ATO will then withhold the appropriate amount of tax before releasing the funds to you. In most cases, this process takes 15-20 business days. 

Note: if you have any debts with the ATO or other commonwealth government agency, these amounts may be deducted from your FHSS withdrawal. 

The ATO will provide you with a payment summary which will need to be included with your tax return. 

And that’s it! You’re all set to buy your first home.  

 Your withdrawals will be taxed, based on the type of contributions you have made - before-tax (concessional) or after-tax (non-concessional contributions). 

• Concessional Contributions: Taxed at 15% when they enter the fund. When released under FHSS, your marginal tax rate applies with a 30% tax offset. 

• Non-Concessional Contributions: No tax applies when it enters the fund, nor when released under the FHSS scheme. 

• Associated Earnings: When released under the FHSS scheme, deemed earnings are taxed at your marginal tax rate with a 30% tax offset.  

Although you can only withdraw 85% of your concessional contributions, the tax rate applied is likely to be lower than your marginal tax rate, meaning that saving for a first home through super can boost your savings.  

Sarah is 31 and earns a salary of $85,000 per year as a software engineer. Over the past five years, she has been making extra contributions to her superannuation to take advantage of the First Home Super Saver (FHSS) scheme. She has salary-sacrificed a portion of her income (concessional contributions) and occasionally added after-tax contributions (non-concessional) from her savings. 

The table below outlines Sarah’s eligible contributions and estimates how much she could release under FHSS rules in July 2026. Concessional contributions are eligible for release at 85% of the amount contributed, while non-concessional contributions are released at 100%. 

• Work out how much you’ll save on tax using this publicly available calculator. 

• Get guidance from the ATO or speak to an accountant or Verve Super coach

*The ATO calculates FHSS notional earnings using a prescribed formula (the Shortfall Interest Charge, which is updated quarterly). The exact earnings are only available once the ATO issues a formal FHSS determination. The figures above are based on an estimated flat rate of return of 6% and should be treated as indicative only. 

FHSS release amounts may be subject to income tax, reduced by a 30% tax offset. The estimated tax payable has not been reflected in the figures above.