RBA Cash Rate: 4.35% · 1AUD = 0.67 USD · Inflation: 4.1%  
Select Portfolio Finance

1300 227 577

Close this search box.

What is the First Home Super Saver Scheme (FHSS)?

If you’re a first home buyer, you may be eligible to withdraw voluntary super contributions you’ve made to put toward a home deposit. Through the First Home Super Saver Scheme (FHSSS), first-home buyers may be able to use Australia’s superannuation system as a tax-effective way to save for part of their home deposit.

The FHSSS applies to voluntary superannuation contributions made from 1 July 2017. These contributions, along with deemed earnings, can be withdrawn for a home deposit from 1 July 2018. For most people, the FHSSS could boost the savings they can put towards a deposit by at least 30 per cent compared with saving through a standard deposit account.

Am I eligible to use the FHSSS?

You can release funds under the FHSSS if you are 18 or over, have not used the FHSSS before, and have never owned real property in Australia. You will be eligible if you meet all eligibility criteria, even if you plan to purchase with a partner who does not meet the criteria.

How do I make my contributions?

Any voluntary contribution you make into your superannuation account can count towards your FHSSS balance. You may speak to your employer to set up a salary sacrifice arrangement, or you may make a personal contribution directly to your fund.

Will my contributions be taxed?

Concessional contributions (e.g. salary-sacrificed) are taxed at 15 per cent in the fund, as usual. Any after-tax contributions are not taxed.

How will my contributions grow?

You will be able to withdraw a deemed rate of earnings on top of your contributions. This deemed rate is set to the ‘Shortfall Interest Charge’. This deemed earnings rate is higher than typical deposit rates currently on offer from financial institutions.

How will my savings be released?

The ATO will be able to tell you the maximum amount you can release under the FHSSS, and you can apply to them to release when you’re ready. Withdrawals are generally taxed at your marginal tax rate less a 30 per cent rebate. The ATO will arrange for money to be released from your super and will pay it on to you. They will withhold an estimate of the tax owed on the withdrawal amount.

What kind of home could I buy?

You must buy a ‘residential premises’ after withdrawing your savings. This includes vacant land (if you’re planning to build), but not any premises that can’t be occupied as a residence, and not houseboats or motor homes. It has to become your home, not an investment property; you would have to occupy the premises for at least 6 months in the year after purchase (or construction).

What if I don’t end up buying a home?

If you don’t buy a home after your time expires, you may either contribute the released amount back into superannuation, or pay a tax equal to 20 per cent of the concessional amount released. This removes the tax benefit you received from using the FHSSS.

More Information

The information relating to this scheme changes regularly so you should also consult the ATO website for more up-to-date details. There’s a good article on the ABC website that tends to outline some of the advantages and pitfalls.

Related Articles in our Blog

You may find useful information and articles in our blog. Feel free to call anytime on 1300227577 for any reason.

Download our First Home Buyer Guide. It includes over 40-pages that'll guide you on your property purchase journey.

  E. Australia Standard Time [ UTC+10, Default ] [ CHECK TO CHANGE ]

  Want to have a no-obligation discussion?

Related FAQs:

Black Piggy Bank

What is the Consumer Price Index (CPI)?

Inflation is an increase in the level of prices of the goods and services that households buy. It is measured as the rate of change of those prices. Typically, prices rise over time, but prices can also fall (a situation called deflation).

Read More »
Blue Money Box

How is the Cash (Interest Rate) Determined?

Monetary policy involves using interest rates to influence aggregate demand, employment and inflation in the economy. It is one of the main economic policies used to stabilise business cycles. The Reserve Bank is responsible for monetary policy in Australia ..

Read More »
Mother and Son Painting

How is Compound Interest Calculated?

Compound Interest is the addition of interest to the principal sum of a loan – basically meaning that you pay interest on interest. Compound interest is standard practice when taking out a home loan.

Read More »

Share this FAQ

Share on Facebook
Share on Twitter
Share on Linkdin
Share on Pinterest