The First Home Super Saver Scheme explained
Here's how hopeful Aussie home buyers can take advantage of the First Home Super Saver Scheme.
Key takeaways
- First home buyers can make voluntary contributions into their super and then access that money plus its earnings to buy property.
- You can contribute up to $15,000 per year, up to $50,000 in total over time. You can then withdraw a maximum of that $50,000 plus any earnings.
- The money in your super will be taxed at a lower rate of 15% compared to your savings account.
What is the First Home Super Saver Scheme?
Under the First Home Super Saver Scheme, first home buyers can make voluntary contributions into their super fund to save for a home. You can withdraw a portion of those extra super contributions to use as a deposit. You can access up to $50,000 in voluntary super contributions in total.
Finder survey: Do Australians of different ages use government grants or schemes to take out their first home loan?
| Response | 75+ yrs | 65-74 yrs | 55-64 yrs | 45-54 yrs | 35-44 yrs | 25-34 yrs | 18-24 yrs |
|---|---|---|---|---|---|---|---|
| No | 2.33% | 3.11% | 1.75% | 5.8% | 5.12% | 11.17% | 8.57% |
| Yes | 0.62% | 3.51% | 5.31% | 12.6% | 12.62% | 14.29% |
Source: Finder survey by Pure Profile of 1112 Australians, December 2023
Benefits of the First Home Super Saver Scheme
- You can earn a higher return on your 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 won’t pay your full marginal tax rate on those 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.
Expert insight
"I'm often asked what I think of this scheme, as it means accessing your super early. However, I'm not averse to it; you're effectively using your super monies to invest in a way that builds your wealth ie through property. Its structure is such that effectively it's a way to turbo charge your home deposit savings."
The First Home Super Saver Scheme explained
Step 1: 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. Post-tax contributions you don’t claim a tax deduction for won’t be taxed when you withdraw them. If you do claim a deduction, they’re treated like pre-tax contributions and taxed the same way when you withdraw them (see below).
You can contribute up to $15,000 per year and up to $50,000 in total across years.
Step 2: While you’re saving
While the money sits 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 $680 after tax and the Medicare levy.
Step 3: When you’re ready to withdraw
When you’re ready to withdraw you have to apply for a FHSS determination through the Australian Taxation Office (ATO), which is responsible for the scheme. You must apply for a First Home Super Saver determination before any property transfers to you.
Once you have the determination and are ready to access the money, you can request a release. You will need to provide the amount you wish to be released, the super fund(s) it's being released from and the bank account to pay the funds to. This can be done before signing the property contract or within 90 days of signing.
It will typically take between 15 and 20 business days for you to receive the funds.
How your funds are taxed
If you've made the additional contributions from your post-tax income and haven't claimed a tax deduction for them, no further tax applies to those contributions while they're in your account or when you withdraw them.
Pre-tax contributions (including post-tax contributions you've claimed a tax deduction for) will be taxed at 15% while they are in your super. When you withdraw the funds, 85% of these contributions can be released, and that amount 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. These are the resident tax rates for the 2026–27 financial year:
| Income bracket | Tax |
|---|---|
| 0 – $18,200 | None |
| $18,201 – $45,000 | 15c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,020 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,020 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,370 plus 45c for each $1 over $190,000 |
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%. These earnings will also be taxed at your marginal rate with a 30% offset.
Who is eligible for the scheme?
To qualify for the First Home Super Saver 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 6 months within the first 12 months after it's practical to move in.
- 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.
- Your name must be on the property title.
"Many Gen Zs, if they're anything like me, are probably with the same super account from their first job. It's probably a good idea to compare before opting in for the first home saver scheme, so you're not stuck in a fund for a few years that isn't performing as well as it could be. For me, I want to pick something stable that I can kind of set and forget for the next decade or two."
More support for first home buyers
- The First Home Guarantee (formerly Loan Deposit Scheme) allows first home buyers to enter the market with a 5% deposit. They can also avoid LMI costs.
- The Family Home Guarantee lets eligible single parents buy a home with a 2% deposit.
- There are also first home owner grants available in every state and territory and possible stamp duty exemptions for first-time buyers.
- The Regional Home Guarantee lets you buy or build a new home in regional Australia with a 5% deposit while avoiding LMI costs.
Frequently Asked Questions
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