Use your super to save for your first home with the First Home Super Saver Scheme (FHSSS)

Saving for your first home isn't easy. Rising property prices and large deposits mean many Australians need a smarter way to save.

The First Home Super Saver Scheme (FHSSS) lets eligible first home buyers use voluntary super contributions to help build a home deposit, with potential tax advantages along the way.

Here's how it works:

You may be able to withdraw up to $50,000 of voluntary contributions, plus associated earnings determined by the Australian Taxation Office (ATO), to put towards your first home.

Voluntary contributions include:

• Salary sacrifice contributions (before tax)

• Personal after-tax contributions

Employer Super Guarantee contributions cannot be withdrawn under the FHSSS.

How the FHSSS can help

The scheme can support growth in two ways.

1. Potential tax benefits

Salary sacrifice contributions are generally taxed at 15% inside super, which may be lower than your marginal tax rate. Depending on your circumstances this may mean more of your money is invested toward your first home.

2. Associated earnings

When you apply to withdraw under the FHSSS, the ATO adds an amount called associated earnings to eligible contributions. This isn't based on your investment returns. Instead, it's calculated using a government-set rate.

Depending on your circumstances, these features may help you build a deposit faster than using a regular bank account.

Remember, super contribution caps still apply. Exceeding these limits may incur additional tax.

FHSSS eligibility

You may be eligible if you:

• Are at least 18 years old when requesting a release

• Have never owned property in Australia before (some exceptions apply)

• Intend to live in the property for at least six months within the first 12 months after it’s occupiable

The ATO also considers certain special circumstances for exemption, such as financial hardship. 

Check the ATO website for the full eligibility criteria.

How to request a release under the FHSS

When you're ready to buy:

1. Log in to myGov and request an FHSS determination to see how much you're eligible to withdraw.

2. Submit an FHSS release request through the ATO.

3. The ATO will contact your super fund and arrange the release.

4. The ATO withholds any required tax before paying the remaining amount directly to you.

Once you request a release, you generally have 12 months to sign a contract to buy or build your first home. You can apply for a further 12-month extension if needed.

Tax implications

The ATO withholds tax before releasing FHSS funds which may affect your taxable income for the financial year. However, eligible FHSS withdrawals receive a tax offset, which helps reduce the tax payable.

The outcome will depend on your individual circumstances, so it's worth seeking advice if you're unsure.

Planning to use the FHSSS with an SMSF?

Learn more about how Stake Super can help you set up and manage your SMSF. Speak to a specialist for general information or get started online today.

First home super saver scheme FAQs

This is not financial product advice, nor a recommendation that a self-managed super fund (‘SMSF’) may be suitable for you. Your personal circumstances have not been taken into account. SMSFs have different risks and features compared to traditional superannuation funds regulated by the Australian Prudential Regulation Authority (‘APRA’). Stake SMSF Pty Ltd, trading as Stake Super, is not licensed to provide financial product advice under the Corporations Act. This specifically applies to any financial products which are established if you instruct Stake Super to set up an SMSF. When you sign up to Stake Super, you are contracting with Stake SMSF Pty Ltd who will assist in the establishment and administration of an SMSF under a ‘no advice model’. You will also be referred to Stakeshop Pty Ltd to enable your trading account and bank account to be set up in order to use the Stake Website and/or App. For more information about SMSFs, see our SMSF Risks page.

Ciara Conway

Commercial Manager - Stake Super

Ciara is a Commercial Manager at Stake Super, with over 10 years of experience in the SMSF industry and an MA in Accountancy and Finance from Heriot-Watt University in Edinburgh, United Kingdom. Having previously worked at a chartered accounting firm and one of the largest SMSF administrators in Australia, Ciara has extensive knowledge of SMSF compliance. She is also a current member of the SMSF Association.