First Home Super Saver Scheme (FHSS) 2025: Complete Guide

FHSS Scheme Quick Facts 2024-25

• Maximum Releasable: $50,000 in contributions (plus associated earnings)
• Annual Contribution Limit: $15,000 per financial year
• Tax Saving: Save up to $7,500 compared to saving outside super
• Earnings Rate: Deemed at SIC rate (currently ~4.96%)
• Withdrawal Tax: Marginal rate minus 30% offset

What Is the FHSS Scheme?

The First Home Super Saver (FHSS) scheme allows you to save money for your first home inside your superannuation fund. The key benefit is the tax saving - contributions are taxed at just 15% instead of your marginal tax rate, and earnings grow tax-effectively.

When you're ready to buy, you can withdraw your FHSS contributions (plus associated earnings) from super to use as part of your deposit. This can help you save faster and get into the property market sooner.

How the FHSS Scheme Works

Contribute

Up to $15K/year into super

Save Tax

15% vs your marginal rate

Withdraw

For your first home

Eligibility Requirements

To be eligible for the FHSS scheme, you must meet the following criteria:

Basic Eligibility

Be 18 years or older when you request a release
Never have owned property in Australia (including investment property)
Never have previously requested an FHSS release
Either live in the home or intend to as soon as practicable
Intend to live in the property for at least 6 months within 12 months of purchase

Property Requirements

Must be a residential property in Australia
Can be an existing house, townhouse, apartment, or new build
Cannot be a houseboat, mobile home, or vacant land
Must sign the contract within 14 days (or extended time) of release

Previous Property Ownership

You cannot use the FHSS if you have ever owned residential property in Australia - even an investment property you never lived in. However, you may still be eligible if you previously owned property with your spouse but only as a trustee.

Contribution Limits

The FHSS scheme has specific limits on how much you can contribute and withdraw:

Limit Type	Amount	Notes
Annual Contribution Limit	$15,000	Per financial year (combined)
Total Contribution Limit	$50,000	Lifetime maximum for FHSS
Maximum Release	$50,000 + earnings	Deemed earnings at SIC rate
Minimum Contribution	No minimum	Any amount works

Important: The $15,000 annual limit applies to combined eligible contributions - both concessional (salary sacrifice, personal deductible) and non-concessional (after-tax). But remember, the standard super contribution caps still apply overall.

Types of Contributions That Count

Eligible Contributions

Voluntary concessional contributions (salary sacrifice)
Personal contributions you claim as a tax deduction
Non-concessional (after-tax) contributions

Not Eligible for FHSS

Compulsory employer Super Guarantee (SG) contributions
Government co-contributions
Spouse contributions
First Home Super Saver releases being recontributed

Tax Benefits Explained

The FHSS provides two key tax advantages:

1. Tax on Contributions

Salary sacrifice or tax-deductible contributions are taxed at just 15% in super, compared to your marginal tax rate. For someone on $80,000, that's a saving of 17.5% on every dollar contributed.

2. Tax on Withdrawal

When you withdraw FHSS amounts, they're taxed at your marginal rate but with a 30% offset. This means you pay significantly less tax than if you'd saved the money outside super.

Income Level	Marginal Rate	Effective FHSS Rate	Tax Saved on $50K
$45,001 - $135,000	32.5%	2.5%	$7,500
$135,001 - $190,000	37%	7%	$6,500
$190,001+	45%	15%	$6,000

FHSS Savings Example: Sarah

Sarah earns $90,000 and salary sacrifices $15,000/year for 3 years:

Without FHSS (saving normally):

Tax on $45,000: $14,625 (32.5%)
Amount saved: $30,375

With FHSS:

Tax in super: $6,750 (15%)
In super: $38,250 + earnings
Tax on release: ~$956
Amount received: ~$40,500

Sarah saves approximately $10,125 more by using the FHSS scheme!

Step-by-Step: How to Use FHSS

Step 1: Make Contributions

Set up salary sacrifice with your employer, or make personal contributions directly to your super fund. Keep track of how much you're contributing each year (max $15,000) and your running total (max $50,000).

Step 2: Request a Determination

Before requesting release, apply for an FHSS determination through ATO online services (linked to myGov). This shows how much you can release. The determination is valid for 14 days.

Step 3: Request Release

When you're ready to buy, request release of your FHSS funds through the ATO. You can request:

Your maximum eligible amount, or
A specific amount (minimum $5,000)

Step 4: Receive Funds

The ATO will send a release authority to your super fund. Your fund then releases the money to the ATO, who sends it to you (minus tax withheld). This typically takes 15-25 business days.

Step 5: Sign Contract

You must sign a contract to buy or build your home within 12 months of requesting release (or apply for an extension). If you don't buy, you may need to recontribute the amount to super or pay additional tax.

Timeline Tip

Plan ahead! The release process can take 15-25 business days. Request your release before you need the funds for settlement. You can request release even before you've found a property.

What If You Don't Buy?

If you request release but don't end up buying a home, you have two options:

Option 1: Recontribute to Super

Recontribute within 12 months of the financial year end
Lodged as a "recontribution" - doesn't count towards caps
You'll receive a tax credit for the amount you paid on release

Option 2: Keep the Money

Pay FHSS tax at 20% on the assessable portion
This is in addition to any tax already withheld
You keep the money but lose the FHSS tax benefit

FHSS for Couples

Each person can use the FHSS scheme individually. If you're buying with a partner, you can both contribute up to $50,000 each, potentially releasing up to $100,000+ combined (plus earnings).

Couple Example: Tom & Lisa

Both Tom and Lisa maximize their FHSS over 4 years:

Tom's FHSS

Contributions: $50,000
Deemed earnings: ~$5,000
Less tax: ~$1,500
Release: ~$53,500

Lisa's FHSS

Contributions: $50,000
Deemed earnings: ~$5,000
Less tax: ~$1,500
Release: ~$53,500

Combined deposit contribution: $107,000

FHSS vs Other Government Schemes

Scheme	What It Does	Can Combine with FHSS?
First Home Guarantee	Buy with 5% deposit, no LMI	Yes
First Home Owner Grant	$10K-$20K for new homes (varies by state)	Yes
Stamp Duty Concessions	Reduced/no stamp duty for first homes	Yes
Help to Buy	Government equity contribution	Yes

You can use FHSS alongside all other first home buyer schemes - they're not mutually exclusive!

Common Mistakes to Avoid

FHSS Mistakes That Cost You Money

1. Not keeping records: Track your FHSS contributions separately from regular super
2. Exceeding the $15K annual limit: Only $15K per year counts for FHSS
3. Requesting release too late: Allow 15-25 business days before settlement
4. Missing the 12-month deadline: You must sign a contract within 12 months
5. Thinking SG counts: Employer super guarantee is NOT eligible for FHSS

Frequently Asked Questions

Can I use FHSS for an investment property?

No. You must intend to live in the property as your home for at least 6 months within 12 months of purchase. It's designed for owner-occupiers only.

What if I already have money in super?

Only voluntary contributions made from 1 July 2017 onwards are eligible for FHSS. Your existing super balance (including employer SG) cannot be accessed through the scheme.

Can I withdraw more than $50,000?

The contribution limit is $50,000, but you'll also receive deemed earnings on those contributions. With several years of savings, you could release more than $55,000 depending on the SIC rate.

What happens to my super after FHSS withdrawal?

Your remaining super (employer SG, other contributions, investment earnings) stays in your super fund for retirement. Only the FHSS portion is released.

Action Checklist

Your FHSS Action Plan

Set up salary sacrifice: Arrange with your employer for super contributions
Track contributions: Keep records of FHSS-eligible amounts separately
Stay within limits: Max $15,000/year and $50,000 total
Get determination: Request from ATO before requesting release
Plan timing: Request release 3-4 weeks before you need funds

Final Thoughts

The FHSS scheme is one of the most effective ways for first home buyers to save for a deposit. By taking advantage of super's tax concessions, you can potentially save thousands more compared to a regular savings account.

The maximum benefit comes from maximising contributions over multiple years. If you're planning to buy in 3-4 years, start contributing now to get the full $50,000 (plus earnings) when you're ready.