How does the First Home Super Saver Scheme work? | Finder

How does the First Home Super Saver Scheme work?

Here's how hopeful Aussie home buyers can take advantage of the First Home Super Saver Scheme.

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

Under the First Home Loan Super Saver Scheme, first home buyers can withdraw a portion of their extra super contributions and use them a deposit for a property. An individual can withdraw a maximum of $15,000 per financial year, with an overall limit of $30,000 total.

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.

The First Home Super Saver Scheme was introduced in the 2017-2018 Federal Budget.

How the first home super saver scheme works.

The First Home Super Saver Scheme explained

Depositing

You start by making voluntary super contributions into your superannuation 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.

It's also important to remember that there are limits on the amount of voluntary superannuation you can save in a year.

While you’re saving

While you’re saving this money in your super fund, 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 $45,000 a year) you'd only pocket around $675.

When you’re ready to withdraw

When you’re ready to withdraw you have to apply with the Australian Taxation Office (ATO), who is responsible for the scheme. You can apply for a First Home Super Saver determination before signing a contract to purchase or construct a home.

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.

Income bracketTax
0 – $18,200None
$18,201 – $45,00019c for each $1 over $18,200
$45,001 – $120,000$5,092 plus 32.5c for each $1 over $45,000
$120,001 – $180,000$29,467 plus 37c for each $1 over $120,000
$180,001 and over$51,667 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 must live in the property for at least six months, within the first 12 months of ownership.
  • You have never owned a property before, including an investment property.
  • You must not be using your contribution to purchase a houseboat, motor home or vacant land.
  • You can only make use of the scheme once.

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 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.
  • How do super account returns compare to regular savings accounts returns? According to research by Chant West, 10-year returns on growth super funds averaged around 8%:
Fund and investment option10-year return (p.a to June 2020)
AustralianSuper Balanced8.8%
UniSuper Balanced8.7%
HostPlus Balanced8.6%
Cbus MySuper8.5%
CareSuper Balanced8.4%
QSuper Balanced8.4%
VicSuper MySuper8.4%
Equip Balanced Growth8.3%
Prime Super MySuper8.1%
Vision Super Balanced Growth8.1%

Source: Chant West

Compare a selection of savings account rates

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.

Start comparing home loans now

Data updated regularly
$
years
Name Product Interest Rate (p.a.) Comp. Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment
Suncorp Back to Basics Home Loan
2.44%
2.45%
$0
$0 p.a.
80%
$589.12
A competitive variable interest rate loan with low fees. The establishment fee is waived if you borrow $150,000 or more.
Greater Bank Great Rate Fixed Home Loan
1.69%
3.49%
$0
$0 p.a.
110%
$532.6
Requires a family member to act as guarantor.
Get one of the lowest rates on the market with this fixed rate mortgage and borrow more with help from a family guarantor. NSW, QLD and ACT residents only.
UBank UHomeLoan Variable Rate
2.34%
2.34%
$0
$0 p.a.
80%
$581.39
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
Westpac Flexi First Option Home Loan
2.29%
2.72%
$0
$8 monthly ($96 p.a.)
95%
$577.55
A flexible and competitive variable rate loan from Westpac. This loan is available with a low deposit.
St.George Basic Home Loan
2.54%
2.56%
$0
$0 p.a.
90%
$596.91
Borrowers can get this flexible and competitive variable loan with just a 10% deposit.
homeloans.com.au Low Rate Home Loan with Offset
2.59%
2.61%
$0
$0 p.a.
90%
$600.83
Save on interest with a free 100% offset account and buy your property with just a 10% deposit. This loan is not available for construction.
IMB Budget Home Loan
2.68%
2.74%
$449
$0 p.a.
95%
$607.92
NSW and ACT customers only. You can get an interest rate discount for a limited time with this competitive variable mortgage.
Newcastle Permanent Building Society  Premium Plus Package Fixed Rate
2.28%
3.84%
$0
$395 p.a.
95%
$576.78
$2,000 refinance cashback
Enjoy a competitive rate with no application fee for this package loan. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
AMP Bank Professional Package Fixed Loan
1.99%
3.1%
$0
$0 p.a.
80%
$554.81
Get a low fixed rate package with no application or settlement fee, that's available with a 20% deposit. Other fees and charges apply.
IMB Budget Home Loan
2.58%
2.64%
$449
$0 p.a.
80%
$600.05
A competitive variable rate for borrowers with 20% deposits saved. Available for NSW and ACT borrowers only.
Well Home Loans Balanced Variable
2.17%
2.2%
$250
$0 p.a.
80%
$568.39
A very low interest rate for home buyers with 20% deposits saved. Add an offset account for a small fee.
ME Flexible Home Loan Fixed with Members Package
1.99%
3.33%
$0
$395 p.a.
80%
$554.81
Lock in a competitive rate for owner occupiers for two years. Comes with a 100% offset account.
Bank of Melbourne Basic Home Loan
2.49%
2.51%
$0
$0 p.a.
80%
$593.01
A low fee, low rate variable rate loan for home buyers. Requires at least a 20% deposit.
HSBC Fixed Rate Home Loan Package
1.88%
2.86%
$0
$390 p.a.
80%
$546.6
Lock in a low fixed rate for 2 years and buy your home with a 20% deposit. This loan also lets you make extra repayments.
IMB Fixed Rate Home Loan
2.09%
2.9%
$449
$6 monthly ($72 p.a.)
95%
$562.33
NSW and ACT customers only. Lock in a low fixed rate for two years. Available with a 5% deposit.
Heritage Bank Discount Variable Home Loan
2.59%
2.64%
$600
$0 p.a.
80%
$600.83
Family guarantee option available. Enjoy flexible repayments and a low minimum loan amount.
Well Home Loans Balanced Fixed Home Loan
2.04%
2.17%
$250
$0 p.a.
90%
$558.56
A low 3 year fixed rate for home buyers. Add a 100% offset account with a $10 monthly fee. Not available for construction purposes.
Greater Bank Great Rate Discount Variable with Family Pledge Home Loan
2.59%
2.6%
$0
$0 p.a.
110%
$600.83
Pay no deposit or LMI and get a discounted rate with this family pledge loan. Requires a family member to act as guarantor. NSW, QLD and ACT only.
Newcastle Permanent Building Society  Premium Plus Package Fixed Rate
2.48%
3.68%
$0
$395 p.a.
95%
$592.23
$2,000 refinance cashback
A two year fixed rate home loan with no application fees. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
Well Home Loans Balanced Variable
2.52%
2.55%
$250
$0 p.a.
90%
$595.35
A very low variable interest rate for borrowers with a 10% deposit. Add a 100% offset account for $10 a month. Not available for construction purposes.
Bank of Melbourne Advantage Package Fixed Home Loan
1.94%
3.21%
$0
$395 p.a.
80%
$551.07
Lock in a competitive fixed rate for four years. Available with a 20% deposit.
St.George Basic Home Loan
2.49%
2.51%
$0
$0 p.a.
80%
$593.01
Competitive, flexible variable rate loan from St.George. Low fees and available with a 10% deposit.
BankSA Advantage Package Fixed Home Loan
1.89%
3.43%
$0
$395 p.a.
80%
$547.35
Get this competitive loan and fix your rate for the first two years. This is a package loan that lets you bundle a transaction account and credit card with the loan.
HSBC Home Value Loan
2.44%
2.45%
$0
$0 p.a.
80%
$589.12
Get a low interest variable rate loan with no ongoing fees. Plus you can make extra repayments and free redraw online.
Bank of Melbourne Basic Home Loan
2.54%
2.56%
$0
$0 p.a.
90%
$596.91
Competitive variable rate home loan.
Newcastle Permanent Building Society Fixed Rate Home Loan
2.38%
4.11%
$595
$0 p.a.
90%
$584.48
$2,000 refinance cashback
Competitive fixed rate for home buyers.Available with a 10% deposit.$2,000 cashback for eligible refinancers borrowing $250,000 or more.
ME Basic Home Loan
2.58%
2.6%
$0
$0 p.a.
80%
$600.05
This variable rate loan keeps the features simple and fees low. This loan is offered by a 100% online lender.
BankSA Basic Home Loan
2.49%
2.51%
$0
$0 p.a.
80%
$593.01
This competitive, flexible variable rate loan requires a 20% deposit and has minimal fees.
St.George Fixed Rate Advantage Package
1.94%
3.21%
$0
$395 p.a.
80%
$551.07
This low fixed rate loan requires a 20% deposit. It's a package loan that lets you add a credit card and transaction account.
UBank UHomeLoan Fixed
1.99%
2.33%
$0
$0 p.a.
80%
$554.81
Fix your mortgage for 1 year with a very competitive rate and no ongoing fees.
Newcastle Permanent Building Society Premium Plus Package Home Loan
2.94%
3.34%
$0
$395 p.a.
95%
$628.65
$2,000 refinance cashback
New borrowers or refinancers can get a discounted rate with this package loan. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
Suncorp Back to Basics Home Loan
2.59%
2.6%
$0
$0 p.a.
90%
$600.83
A competitive variable interest rate loan with low fees. The establishment fee is waived if you borrow $150,000 or more.
IMB Fixed Rate Home Loan
1.97%
2.81%
$449
$6 monthly ($72 p.a.)
95%
$553.31
NSW and ACT customers only. 3 years fixed interest terms and free access to redraw facility online. Available with a 10% deposit.
CUA Achieve Variable Home Loan
2.35%
2.4%
$600
$0 p.a.
95%
$582.16
Home buyers can get a competitive, low-fee variable rate plus a 100% offset account. Low deposit option available. Eligible new home buyers with low deposits can apply for the First Home Loan Deposit Scheme with this lender and avoid LMI costs. Eligible refinancers can get a $2,000 pre-paid credit card when they switch to CUA.
Newcastle Permanent Building Society Real Deal Home Loan
2.59%
2.63%
$595
$0 p.a.
80%
$600.83
$2,000 refinance cashback
$2,000 cashback for eligible refinancers borrowing $250,000 or more.
ME Flexible Home Loan With Member Package
2.59%
3.05%
$0
$395 p.a.
80%
$600.83
This flexible variable rate loan comes with a 100% offset account and redraw facility. Requires a 20% deposit.
loading

Compare up to 4 providers

More guides on Finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site