Dreaming of owning your first home? What if your super could potentially help make it happen?
For many Aussies, buying a first home feels like a distant dream—especially with rising property prices, the cost of living climbing, and wages not always keeping pace.
But what if there was a smarter way to save that not many people are tapping into? That’s where the First Home Super Saver (FHSS) Scheme comes in. It’s a government initiative created to help first-time buyers build their deposit more efficiently by using their superannuation account. Yes, your super — the same one you probably don’t think about until retirement.
Since its introduction in 2017, the First Home Super Saver (FHSS) Scheme has provided eligible First Home Buyers (FHBs) in Australia with a valuable opportunity to grow their home deposit savings through voluntary super contributions. These contributions—taxed at a concessional rate of 15%—could offer a more tax-effective savings pathway compared to traditional savings accounts, depending on individual circumstances. Withdrawals are subject to ATO approval and specific conditions, and it’s important to consider any applicable tax implications. For many, the FHSS Scheme can be a smart and structured way to take a confident step toward home ownership.
Under the scheme, you can contribute up to $15,000 per financial year—and up to $50,000 in total—into your super through salary sacrificing or after-tax contributions. Then, when you’re ready to buy your first home, you can apply to withdraw those voluntary contributions (plus the earnings calculated at a set rate) to use as part of your deposit.
So why might this matter to you? Because the FHSS Scheme could help boost your home deposit—by making use of a system already designed to support your financial future. With concessional tax treatment and structured savings, it offers a compelling alternative to traditional bank accounts. And when it comes to securing a home loan, every dollar saved with purpose can make a meaningful difference.
Tip: If you’re thinking of using the FHSS Scheme, start by checking whether your super fund accepts voluntary contributions and salary sacrifice arrangements. Not all funds are the same, and it’s best to get this sorted early.
In this blog post, we’ll break down everything you need to know about how the FHSS Scheme works, who’s eligible, how to apply, the pros and cons, and what to watch out for—so you can make an informed decision on your path to home ownership.
What is the First Home Super Saver (FHSS) Scheme?
Let’s break it down in layman’s terms. The First Home Super Saver (FHSS) Scheme is a government program that allows eligible first home buyers to save money for a home deposit inside their superannuation fund. Why use your super? Because the potential tax benefits and Compound growth within super may help your savings grow more over time compared to keeping them in a regular savings account.
This scheme is designed exclusively for first home buyers—so if you’ve owned a home before, it’s likely you won’t qualify (though there are some exceptions for those who’ve suffered financial hardship; we’ll touch on that later). For the majority, though, it’s aimed squarely at helping Australians break into the market for the very first time.
The FHSS Scheme was introduced in July 2017, largely in response to the growing concern that first home buyers were being locked out of the property market due to soaring house prices and the difficulty of saving a 20% deposit. The government’s goal? To offer an innovative way for younger or first-time buyers to build up their savings in a potentially tax-effective environment, making home ownership more achievable.
So what makes it so appealing? Here’s a quick snapshot of the main benefits:
- Tax savings: Contributions made through salary sacrifice are taxed at just 15%, which is usually lower than your income tax rate. This means more of your money goes towards your savings, helping you build your deposit sooner.
- Potential for stronger growth: Funds within super may benefit from compounding returns and investment earnings, offering stronger growth potential than a standard bank account—especially over time.
- Larger potential deposit: You can contribute up to $15,000 per financial year, and withdraw a maximum of $50,000 in total (per individual), helping you potentially reach your goal sooner.
For couples, that means potentially $100,000 combined—a game-changer when you’re trying to hit that magic deposit number.
It’s not just about saving money—it’s about saving smarter. And if you’re eligible, this scheme could give you a much-needed leg-up in today’s tough market.
How Does the FHSS Scheme Work?
Now that you’ve got a general idea of what the FHSS Scheme is, let’s unpack how it actually works—because this part is where the magic happens. It’s not automatic; you have to take action and make voluntary contributions to your super. These aren’t your employer’s regular super payments (those stay put for retirement)—we’re talking about money you choose to add on top.
There are two main types of voluntary contributions you can make:
- Concessional contributions – These are before-tax contributions, usually made through salary sacrificing. They’re taxed at just 15% going into your super, which may be a lot lower than your marginal tax rate. That’s where the tax saving comes in.
- Non-concessional contributions – These are after-tax contributions, where you’ve already paid income tax before contributing. There’s no tax going in, but the contributions still count toward your FHSS amount and may help your savings grow more effectively inside super.
The maximum you can contribute toward the FHSS Scheme is $15,000 per financial year and $50,000 in total. These limits apply to the voluntary contributions only, not the investment earnings or your employer’s super guarantee. If you’re part of a couple, you can both participate, meaning together you could potentially withdraw up to $100,000 toward a joint home deposit—without dipping into your regular super balance.
It’s important to note that FHSS contributions are not separate from your general super account—they’re just tagged for the purpose of withdrawal later under the scheme. But unlike regular super, which is locked away until you retire, FHSS allows you to access these specific contributions (plus associated earnings) to buy your first home. That’s what sets it apart.
Once you’re ready to take the next step—buying a home—you apply through the ATO to have your FHSS contributions released. The amount you can withdraw includes:
- 100% of your eligible concessional and non-concessional contributions, and
- Associated earnings, which are calculated using a deemed rate set by the ATO (not necessarily the actual earnings your fund makes).
Currently, the maximum you can withdraw is $50,000 for individuals (or $100,000 for couples), which could go a long way toward your deposit—especially if you’re in a high tax bracket and saving aggressively.
Quick tip: Keep in mind that FHSS withdrawals can take a few weeks to process, so don’t sign a property contract until the funds are safely in your account. Timing is key!
Eligibility Criteria: Who Can Use the FHSS Scheme?
Before you start setting up extra contributions to your super, it’s important to check whether you’re actually eligible to use the FHSS Scheme. The rules are fairly straightforward, but they do matter—especially when it comes time to apply for a release of funds.
Who qualifies?
The FHSS Scheme is designed for first home buyers, which means you must have never owned property in Australia before. That includes:
- A home
- Investment property
- Commercial property
- Even vacant land
However, if you have previously owned property but lost it due to financial hardship—such as through divorce, bankruptcy, or illness—you may still qualify. In this case, you’ll need to apply for a special exemption through the ATO.
To be eligible, you also need to:
- Be 18 years or older
- Have not previously accessed the FHSS Scheme
- Live in or intend to live in the property as soon as practicable after purchase (within 12 months of settlement), and stay there for at least six months within the first 12 months of moving in
In other words, this scheme is not for buying a rental property or a holiday home—it’s designed to help you get into your primary place of residence (PPR).
What counts as a “first home”?
A first home under this scheme can be any type of residential property, including:
- Established houses
- Townhouses
- Units or apartments
- House-and-land packages
- Off-the-plan purchases
Vacant land is also eligible as long as you plan to build your first home on it, and you meet the other live-in requirements.
Releasing the funds
When you’re ready to buy, you’ll need to apply to the ATO for the release of your FHSS savings. You can’t just ask your super fund directly—the ATO handles all FHSS withdrawals. Once your application is processed, the ATO will release your eligible voluntary contributions (plus earnings) to your super fund, and then the fund transfers the money to you.
Here’s the catch: you must not have already signed a contract to purchase or build the home before your funds are released. You can start looking, but don’t sign on the dotted line until the money’s in your hands.
Also, once the funds are released, you’ll have 12 months to sign a contract to buy or build your first home. If you need more time, you can request a one-time extension of another 12 months—or choose to recontribute the funds back into your super if plans change.
What about couples?
Yes, couples can absolutely apply together—but each person must meet the individual eligibility criteria. That means you both must be first home buyers and not have accessed the FHSS Scheme before. If you both qualify, each of you can contribute and withdraw up to $50,000, giving you a potential combined deposit of $100,000 through the scheme.
That’s a serious leg-up in today’s competitive housing market—and one of the most powerful ways for couples to maximise the benefits of the FHSS Scheme.
Step-by-Step: How to Use the FHSS Scheme to Buy Your First Home
Alright, so you meet the eligibility criteria and you’re keen to take advantage of the FHSS Scheme. What now? Let’s walk through the process, step by step, so you know exactly how to put this powerful tool to work.
Step 1: Make Voluntary Contributions
The very first step is to start making voluntary contributions into your super account. Remember, these must be above and beyond your employer’s regular super guarantee contributions. You can do this in two ways:
- Concessional (before-tax) contributions – usually made through salary sacrificing from your employer payroll.
- Non-concessional (after-tax) contributions – made directly from your take-home pay.
You can contribute up to $15,000 per financial year and up to $50,000 in total that counts towards the FHSS. It’s a good idea to track your contributions carefully using your MyGov account linked to the ATO to make sure you don’t go over the cap.
Tip: Setting up salary sacrifice correctly could be one of the most effective ways to grow your home deposit through super. Speak with your payroll team or a qualified financial advisor to ensure everything is structured properly—so you can make the most of the tax advantages and stay on track toward your first home goal.
Step 2: Apply to Release Funds Through the ATO
Once you’ve saved up what you need (or close to it), the next step is to formally apply to the ATO to have your FHSS funds released. This is done through your MyGov account, not your super fund.
The ATO will:
- Calculate your eligible contributions
- Add a deemed amount of earnings (based on a set interest rate, not actual super performance)
- Withhold any applicable tax (a flat 15% offset is usually applied)
- Instruct your super fund to release the funds to you
The entire release process can take up to 15 to 25 business days, depending on how quickly your fund responds—so don’t leave this to the last minute.
Important: You must apply for the release before signing a contract to buy or build your home. The ATO is strict on this—sign too early, and you could miss out on using the FHSS funds altogether.
Step 3: Use Released Funds Within 12 Months
Once the funds land in your bank account, you have 12 months to sign a contract to purchase or build your first home. If you’re not quite ready, you can apply for a one-time extension of another 12 months. If life changes and you no longer plan to buy, you’ll need to return the money to your super fund or face additional tax.
From here, you can use the released amount as part of your home deposit—either to meet a lender’s minimum deposit requirement or to boost your buying power and avoid things like Lenders Mortgage Insurance (LMI).
Tip: As your FHSS balance grows, it’s a good idea to connect with your mortgage broker early. This helps ensure your finance strategy aligns smoothly with your savings timeline and property goals. Coordinating the release of FHSS funds with your loan pre-approval and contract signing can make the home-buying process more seamless and less stressful.
Pros and Cons of Using the FHSS Scheme
The First Home Super Saver Scheme is a great opportunity—but like anything involving your finances, it’s important to weigh up both the benefits and the potential drawbacks. Let’s take a balanced look at what you can expect if you choose to go down this path.
The Pros
1. It could be a tax-effective way to save
One of the strong perks of the FHSS Scheme is the tax advantage. When you make concessional (before-tax) contributions—like through salary sacrifice—those amounts are taxed at just 15%, which is usually much lower than your regular income tax rate. That means you’re saving more of your own money and less is going to the tax office.
Over time, that tax saving adds up—and it could make a real difference to your deposit size, especially for middle- to higher-income earners.
2. Your savings may grow more over time compared to a regular account.
Because the money sits inside your super fund while it grows, your contributions benefit from compound earnings over time. Even though the earnings used in the withdrawal calculation are based on a set rate (not your fund’s actual returns), the environment inside super tends to be more growth-focused than your average bank account.
So instead of your deposit sitting idle, it’s actively working for you.
3. It can be combined with other first-home schemes
Here’s a little-known bonus: the FHSS Scheme can be used alongside other government initiatives, like:
- The Home Guarantee Scheme (formerly First Home Loan Deposit Scheme), which helps eligible buyers purchase with as little as 5% deposit and no LMI
- Stamp duty concessions for first home buyers in most states and territories
- First Home Owner Grants (FHOG) where available
So, you’re not putting all your eggs in one basket—you’re stacking up the support to give yourself the best please remove possible chance of buying your first home sooner and smarter.
Tip: Combining FHSS with the Home Guarantee Scheme is especially powerful—your FHSS funds could form the bulk of your 5% deposit, while the Guarantee takes care of the rest.
The Cons
1. There are strict withdrawal conditions
The FHSS Scheme has very specific rules around when and how you can access your money. You must apply for a release from the ATO before signing a contract to buy or build your home. Miss that timing, and you won’t be able to use your FHSS funds—even if you’ve already saved up a solid amount.
There are also time limits once the money is released. You’ve got 12 months to sign a contract, with one possible 12-month extension. If that timeframe passes and you don’t buy, you’ll either have to return the funds to super or pay extra tax. So it’s not as flexible as just drawing from a bank account when you feel ready.
2. Your money is tied up in super
Unlike a regular savings account where you can move or access your money any time, voluntary contributions made for FHSS are locked in until the ATO approves your withdrawal. That means you can’t suddenly decide to use those savings for something else—like an emergency expense or a change in life plans.
Plus, your funds are invested according to your super fund’s portfolio. While that often means higher growth potential, it also means you don’t have full control over how or where your money is invested during that time.
3. Possible delays in receiving the funds
This is a big one that catches people off guard: the release process can take several weeks—anywhere from 15 to 25 business days, sometimes more if your super fund is slow to act. That can cause stress if you’re rushing to meet settlement deadlines.
That’s why it’s so important to plan ahead, work closely with your broker or advisor, and factor in those timelines before you start house hunting seriously.
Tip: Apply for FHSS release before you get pre-approval or sign any contracts. Give yourself plenty of breathing room to avoid funding delays or last-minute stress.
FHSS vs. Other First Home Buyer Schemes: What’s the Difference?
If you’re diving into the world of first home buyer support, you’ve probably noticed there are a few government schemes floating around — and it can feel like alphabet soup trying to figure out which one’s which. The good news? These schemes aren’t either/or. In many cases, you can combine them to get even more bang for your buck.
Let’s quickly compare how the First Home Super Saver (FHSS) Scheme can be used in support of some of the other major initiatives available.
Home Guarantee Scheme (HGS)
This scheme (formerly known as the First Home Loan Deposit Scheme) helps eligible first home buyers purchase a property with as little as 5% deposit — without paying Lenders Mortgage Insurance (LMI).
- Who’s it for? Singles earning up to $125,000 or couples earning up to $200,000 (combined).
- How does it work? The government guarantees part of your loan, so the lender doesn’t require a 20% deposit.
- How it differs from FHSS: HGS helps you buy sooner with a lower deposit, while FHSS helps you build up a larger deposit through structured savings.
- Can they be combined? Absolutely. You can use your FHSS-released funds as part of your 5% deposit under the Home Guarantee Scheme. Many buyers do!
First Home Owner Grant (FHOG)
This is a one-off cash grant offered by most state and territory governments, typically for buying or building a new home (not existing properties).
- How much is it? Varies by state
- Who qualifies? Must be a first home buyer purchasing a new home (usually under a price cap).
- How it differs from FHSS: FHOG is a direct cash grant from the state; FHSS is savings you’ve accumulated from your own income via super.
- Can they be combined? Yes! If you’re building or buying new, you could combine the FHOG, FHSS savings, and the Home Guarantee Scheme.
Stamp Duty Concessions
Stamp duty (or transfer duty) is a big upfront cost in many states — often tens of thousands of dollars. Luckily, first home buyers may get exemptions or discounts.
- Where is it available? All states and territories have some form of concession. For example:
- In VIC, first home buyers can get a full exemption for homes up to $600,000.
- In NSW, under the First Home Buyer Assistance Scheme, you can pay no stamp duty for properties up to $800,000.
- How it differs from FHSS: This scheme reduces your upfront costs, while FHSS helps you build your deposit.
- Can they be combined? Yes — in fact, most first home buyers use stamp duty concessions alongside their FHSS funds.
When to Combine Schemes for Maximum Benefit
Here’s the smart play: stack the schemes if you’re eligible.
Let’s say you’re a first home buyer earning under $125k, buying a new home under $750k. You could potentially:
- Use the FHSS to save $40–50k for your deposit
- Buy with only a 5% deposit under the Home Guarantee Scheme
- Receive a $10k First Home Owner Grant
- Get a stamp duty exemption worth thousands
When used together, these programs may potentially help you to reduce your saving timeline, help you avoid costly fees, and get you into the market sooner — without compromising your financial security.
Tip: Every scheme has its own rules, caps, and eligibility checks. It’s a good idea to speak to your mortgage broker or financial advisor early so you can line them all up and make your first home journey as welll prepared and cost-effective as possible
Common Questions Mortgage Brokers Get About the FHSS Scheme
Navigating first home buyer schemes can feel overwhelming, especially when you’re trying to juggle timelines, paperwork, and major life decisions. These are some of the most common questions people ask about the First Home Super Saver (FHSS) Scheme—and the answers can make all the difference when planning your next steps.
“Can I use the FHSS and the Home Guarantee Scheme at the same time?”
Yes, you absolutely can. In fact, many first home buyers do—and it can be a smart move. The FHSS Scheme helps you save up to $50,000 (or $100,000 as a couple) through your super fund to put towards a deposit. The Home Guarantee Scheme, on the other hand, lets you purchase a home with as little as 5% deposit and no Lenders Mortgage Insurance (LMI).
Using both schemes together may potentially help accelerate your entry into the market and reduce upfront costs.
“What if I change my mind about buying?”
If you’ve already withdrawn your FHSS funds but decide not to go ahead with a property purchase, you have a couple of options:
- Recontribute the funds back into your super (they’ll be preserved until retirement)
- Or, keep the funds and pay the FHSS tax penalty, which is designed to discourage non-home use
You must either sign a contract to buy or build within 12 months of receiving your FHSS funds—or apply for a one-time 12-month extension. Planning and timing are essential here, so make sure you’re confident about your decision before applying for a release.
“Will using the FHSS affect my borrowing power?”
Not directly. FHSS funds are treated like any other deposit when assessed by a lender. What really matters to banks is the size of your deposit, your credit history, income, and existing debts.
However, FHSS can boost your deposit size, helping you meet the lender’s minimum deposit requirement more easily, or reduce your Loan-to-Value Ratio (LVR), which can sometimes lead to more favourable loan terms.
Tip: Be upfront with your mortgage broker about your FHSS plans—they’ll factor the timing of your fund release into your borrowing strategy.
How a Mortgage Broker Can Help You Navigate the FHSS Scheme
The FHSS Scheme can be a game-changer—but only if the timing lines up with your finance, your home search, and your settlement deadlines. That’s where having a knowledgeable mortgage broker in your corner can make a real difference.
Let’s be honest—saving through super, applying for release via the ATO, and lining that up with a lender’s pre-approval and property settlement dates isn’t exactly straightforward. But it doesn’t have to be stressful either.
Aligning Your Super Release with Pre-Approval
One of the trickiest parts of using FHSS is the release timing. You can’t apply for the money after signing a contract, and once you request the release, the clock starts ticking—usually about 15 to 25 business days to get the funds in your account.
A mortgage broker can help you plan out when to:
- Apply for the FHSS release
- Get your loan pre-approval ready
- Start making serious offers
That way, you may be able to avoid the classic mistake of being ready to buy before your funds are.
Coordinating the Timing Between ATO, Lenders, and Settlement
There’s a lot of back-and-forth between government agencies, your super fund, and the bank—and each step has its own delays. A good broker helps you manage that timeline, communicate with your lender, and ensure everything aligns with your settlement schedule.
If you’re using multiple schemes (like FHSS + Home Guarantee Scheme + stamp duty concessions), this becomes even more important. The right coordination can be the difference between a smooth transaction and a missed opportunity.
Recommending Loan Products That Work with FHSS
Not all home loans are created equal—and not every lender is flexible when it comes to FHSS timing or deposit sources. A broker can:
- Recommend lenders who understand FHSS deposits
- Identify loan products that suit first home buyers
- Help you understand whether your FHSS amount will meet a lender’s deposit requirement or impact your LVR
This kind of guidance takes the guesswork out of the equation and gives you a clearer path from super savings to settlement.
Quick Tip: Bring your FHSS plan into the conversation early, ideally before you’ve even applied for the fund release.
Final Thoughts & Next Steps
Buying your first home is a huge milestone—and the First Home Super Saver (FHSS) Scheme can potentially be one of the most powerful (and underused) tools to help make it happen sooner. By saving through your super, you’re not just putting money aside—you’re doing it in a way that’s tax-smart, structured, and designed to grow more effectively than traditional savings methods.
Buying your first home is a significant financial step. The First Home Super Saver (FHSS) Scheme may offer a structured way to save for a deposit by using voluntary contributions to your superannuation. This approach could provide tax advantages and may support long-term savings growth, depending on your individual circumstances. While the scheme is not widely used, it could be a helpful option for eligible first-time buyers. It’s important to understand the eligibility criteria, contribution limits, and timing requirements before deciding if it suits your goals.
Let’s quickly recap what we’ve covered:
- FHSS allows you to contribute up to $50,000 (or $100,000 as a couple) through your super for a home deposit.
- You may get the benefit of lower tax on contributions and earnings, which means more money working for you.
- The scheme can be combined with other initiatives like the Home Guarantee Scheme, First Home Owner Grant, and stamp duty concessions.
- There’s a clear process: make contributions, apply for release, and use the funds within the 12-month timeframe to buy or build your home.
But timing, eligibility, and coordination matter. That’s why having the right guidance can make a real difference as you explore your options.
Next step? Speak to a mortgage broker today to find out how the FHSS Scheme can fit into your home loan strategy. Whether you’re just starting to save or already eyeing properties, the right advice can potentially help you make confident, informed decisions—without missing a beat.
We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter. It contains general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.
Take control of your financial future today. Contact our mortgage brokers to find a loan option within your best interest
and start your journey toward financial independence.
Disclaimer:
This page provides general information only and has been prepared without taking into account your objectives, financial situation, or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax, or financial advice and you should always seek professional advice in relation to your individual circumstances.
Licensing statement:
Credit Representative 556602 is authorised under Australian Credit Licence 389328.
Your full financial situation would need to be reviewed prior to acceptance of any offer or product.