How does the First Home Super Saver Scheme work?

The first home super saver scheme

Here’s how Aussies looking to get into the property market can take advantage of the First Home Super Saver Scheme.

From 1 July 2018 first home buyers can withdraw a portion of their extra super contributions made since July 2017 and use them a deposit for a property. An individual can withdraw a maximum of $30,000 using the scheme.

This benefits buyers because:

  • You might earn a higher return on the deposit money as the return on a super account is higher than a regular savings account.
  • You can salary sacrifice these contributions into your super account so they come from your pre-tax income. This means you’ll avoid being taxed for making deposits.
  • The money in the account will be taxed at 15%, meaning most Australians using the scheme will pay much less tax on their contributions.
  • When it’s time to withdraw funds, you’ll be taxed at a marginal rate less a 30% offset.

How the first home super saver scheme works.

So how does it work?


Starting from 1 July 2017, you’ll be able to make voluntary super contributions into your account. If your employer agrees, you can make this through your pre-tax income to save on tax.

If your employer doesn’t agree to salary sacrifice or if you’re self-employed, you can contribute your post-tax income into the scheme and then make tax deduction claims on personal contributions afterwards. Money that’s deposited through post-tax income won’t be taxed when you withdraw it.

You can contribute up to $30,000 in total using the scheme, but each year has a maximum limit of $15,000.

While you’re saving

While you’re saving this money, it’ll be taxed at 15% rather than your regular tax rate. The earnings on any money you’ve deposited will also be taxed at this rate. Given that most Australians pay 30% or more in tax this is a big saving. If you salary sacrificed $1,000 of pre-tax income into your super fund you'll end up with $850 after tax. If that money went into your bank account at your normal tax rate (assuming you're earning over $37,000 a year) you'd only pocket around $675.

When you’re ready to withdraw

Withdrawals can be made from 1 July 2018, and when you’re ready to do so you’ll be dealing with the Australian Taxation Office (ATO) who is responsible for the scheme.

Pre-tax contributions will be taxed at your marginal rate minus a 30% offset. Your marginal rate is basically the per-dollar amount you get taxed in your tax bracket. So if you’re in the $37,001 - $87,000 bracket for example, your marginal rate is 32.5c or 32.5% of every $1 over $37,000.

Income bracket Tax
0 – $18,200 None
$18,201 – $37,000 19c for each $1 over $18,200
$37,001 – $87,000 $3,572 plus 32.5c for each $1 over $37,000
$87,001 – $180,000 $19,822 plus 37c for each $1 over $87,000
$180,001 and over $54,232 plus 45c for each $1 over $180,000

Source: ATO

Post-tax contributions will not be taxed when you withdraw them.

You can also withdraw the earnings that your money accrues while in your super account. Because you’ll be depositing these amounts into an account which already has non-First Home Super Saver Scheme funds in it, the amount of earnings you can withdraw will be decided using a percentage made up of the 90 day Bank Bill Swap Rate plus 3%.

Who is eligible for the scheme?

To qualify for the first home super save scheme you must meet the following criteria:

  • You must be 18 or older to access your super contributions.
  • You have never owned a property before, including an investment property.
  • You cannot use your contribution to purchase a houseboat, motor home or vacant land.
  • You can only make use of the scheme once.

Need a home loan? Start comparing your options

The most common questions about the First Home Super Saver Scheme

  • Can my partner and I access the scheme together? Yes. Applicants using the scheme are assessed individually and can purchase a property together. So if you and your partner meet the eligibility criteria and have made voluntary contributions to your super funds you can make double use of the scheme, doubling your maximum amount to $60,000.
  • What if I need to access the money for a non-home-deposit-related emergency? Details have not been given as to how this will work. With regular super accounts, accessing your super early usually requires that you’re in severe financial hardship, are temporarily or permanently disabled, are diagnosed with a terminal illness, or on compassionate grounds. Compassionate grounds can include medical bills, funeral costs and more.
  • What else should I be wary of? Because any money deposited under this scheme will be at the mercy of your super account performance, comparing super accounts and also updating your risk appetite will be crucial. You can compare super accounts in our guide.
  • Is there a minimum amount I need to deposit to be able to use this scheme? There has been no mention of a minimum amount so far.
  • What if I’m self-employed or my employer doesn’t offer salary sacrificing? If you’re self-employed or your employer doesn’t want to offer salary sacrificing, the scheme is still available. These first home buyers will be able to deposit their post-tax income and then reconcile these deposits during tax time, taking advantage of tax deductions for the contributions.
  • What if you want to buy a property before 1 July 2018? Unfortunately you will not be able to benefit from this scheme if you're buying before the withdrawals period starts.
  • How do super account returns compare to regular savings accounts returns? According to research by Chant West in 2016, median returns for super funds with a growth investment option were 3% for the 2015/2016 financial year. The top 10 performing funds for 2015/16 according to Chant West were:
Fund and investment option Return - 1 year to June 2016
QSuper Balanced 7.6%
BUSSQ Balanced Growth 7.0%
UniSuper Balanced 5.9%
Catholic Super Balanced (MySuper) 5.7%
Cbus Growth (Cbus MySuper) 5.5%
MTAA My AutoSuper (Balanced) 5.5%
REI Super Trustee Super Balanced 5.4%
Statewide Super MySuper 5.1%
HOSTPLUS Balanced 5.0%
AustralianSuper Balanced 4.5%

Source: Chant West

Note that this doesn’t take into account fees, taxes and commissions. Also note that past performance doesn’t give an indication of how these accounts will perform in the future.

You can compare a selection of savings account rates below.

Rates last updated September 24th, 2018
Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Interest Earned Product Description
RaboDirect High Interest Savings Account
$0 / $1
Introductory rate of 3.05% p.a. for 4 months, reverting to a rate of 1.80% p.a. Available on balances below $250,000
HSBC Serious Saver
$0 / $0
Introductory rate of 3.10% p.a. for 4 months, reverting to a rate of 1.40% p.a. Available on balances below $1,000,000.
AMP Saver Account
$0 / $0
Introductory rate of 2.55% p.a. for 4 months, reverting to a rate of 2.10% p.a. Available on balances below $5,000,000.
ING Savings Maximiser
$0 / $0
Ongoing, variable 2.80% p.a. when you link to an ING Orange Everyday bank account and deposit $1,000+ each month and make 5+ card purchases a month. Available on balances up to $100,000.
Bankwest Hero Saver
$0 / $0
Ongoing, variable 2.60% p.a. rate when you deposit at least $200 each month and make no withdrawals. Available on balances up to $250,000.
HSBC Flexi Saver Account
$0 / $0
Ongoing, variable 2.50% p.a. when you deposit $300+ each month (other conditions apply). Available on balances up to $5,000,000.
AMP SuperEdge Saver Account
$0 / $0
Link to your SMSF. Ongoing, variable 2.05% p.a. when you link to AMP SuperEdge Cash Account or a different transaction account for your SMSF in another bank. Available on the entire balance.

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