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First Home Super Saver Scheme (FHSSS)

The First Home Super Saver Scheme (FHSSS) allows first home buyers to make voluntary super contributions and then withdraw those contributions (plus earnings) to fund a first home deposit. The scheme’s tax advantages make it worth roughly 10-25% extra savings power for higher earners. It is under-used relative to how good it is.

The basic mechanics

Contribute: voluntary pre-tax contributions via salary sacrifice, or voluntary after-tax contributions. Annual contribution cap: $15,000. Total cap across the scheme: $50,000.

Invest: the contributions sit in your super fund, invested with your super’s chosen strategy.

Withdraw: once ready to buy, apply to the ATO for a “determination” of your releasable amount. Receive funds (usually within 15-20 business days). Use within 12 months (or 24 months with extension).

Purchase: contract the property purchase with FHSSS funds as part of your deposit.

Why the tax math works

Pre-tax contribution (salary sacrifice): taxed at 15% entering super. If your marginal rate is 32.5% or 37%, you save 17.5-22 percentage points of tax on the contribution.

Withdrawal: taxed at (your marginal rate) minus 30 percentage points, with a tax offset. For a 32.5% marginal rate borrower, withdrawal tax is effectively 2.5%.

Net effect: contribute $15,000 pre-tax, receive $14,625 at withdrawal (after tax) vs $10,125 if you had taken the $15,000 as salary and saved it in a regular account (assuming 32.5% marginal). That’s ~44% more spendable savings after 12 months.

For higher earners

Someone on a 37% marginal rate benefits more. Someone on a 45% marginal rate benefits even more. For 32.5% or below, the advantage is still positive but smaller.

The interaction with employer super contributions

FHSSS contributions must be voluntary - they are on top of your employer’s mandatory 11% (or 11.5% from July 2025, stepping to 12% from July 2025). Your employer’s contribution is not included in the scheme.

The $50k total cap gotcha

The $50,000 cap is lifetime, not per property. Once you’ve contributed $50k (across multiple years), you cannot add more even if your circumstances change. Plan accordingly.

How couples use the scheme

Each applicant has their own $50k cap. A couple can collectively access $100k in FHSSS withdrawals to fund a first home deposit.

The withdrawal application

  • Apply via the ATO once you are ready to buy (or up to 14 days after signing a contract)
  • The ATO processes the determination and pays the amount to your bank account
  • You must notify the ATO of your home purchase within 28 days of settlement

What disqualifies you

  • You have previously owned residential property in Australia (first home buyer test)
  • You applied to withdraw previously but didn’t follow through with a purchase - you can retry but there are re-application complications

Why it’s under-used

The scheme requires setup 12+ months before purchase. First home buyers who decide to buy this year, with no prior salary sacrifice setup, can’t realistically use FHSSS meaningfully - you’re limited to one $15k contribution in the current year, with a 12-month window.

The scheme works best when started 2-3 years before intended purchase. Set up salary sacrifice to contribute $15k/year via your employer. Over 3 years, you accumulate $45k + earnings, withdraw with favourable tax, and boost your deposit.

For first home buyers on $100k+ income planning to buy in 2027-2028, FHSSS set up today is one of the highest-value single moves available.