First Home Super Saver Scheme 2026: How to Pull \$50,000 Out of Your Super for a Deposit

Overview

The First Home Super Saver scheme (FHSS) lets first home buyers use their superannuation as a tax-advantaged savings account for a deposit. It is one of the few genuine free lunches in Australian tax — if you're eligible and plan it properly, you can save several thousand dollars compared with stashing the same money in a high-interest bank account.

This is a plain-English walkthrough of what the scheme does, who qualifies, the caps and timelines that matter, and the five traps that catch most applicants. It's general information, not personal financial advice — specifics should always go through your tax agent or licensed adviser.

What the scheme actually does

You make extra voluntary contributions into your super fund. Later, when you're ready to buy your first home, you apply to release those contributions back out — plus imputed earnings — to use as part of your deposit.

The benefit is purely tax:

• Concessional (salary-sacrificed) contributions enter super taxed at 15%, instead of your marginal rate (up to 45%).
• The associated earnings are calculated by the ATO at a fixed formula rate, not your actual super fund's returns.
• On release, a 30% FHSS tax offset applies against the tax you'd otherwise pay on the released concessional amount.

For someone on the 37% marginal rate saving $15,000 a year, the gap between saving inside super at 15% and saving in a bank account at 37% is roughly $3,300 per year of contributions — before earnings.

How much you can save

The caps are set by the ATO and haven't changed since the lift in July 2022:

• $15,000 per financial year — the maximum FHSS-eligible voluntary contribution per FY.
• $50,000 total across all years — the lifetime cap for release.
• If your first FHSS determination request was before 1 July 2022, the total cap is still $30,000.

Couples can both use the scheme. Two first home buyers pooling their FHSS can release up to $100,000 plus associated earnings toward a shared deposit.

Model how fast you'll hit your deposit goal with our Deposit Savings Calculator.

Which contributions count

Only voluntary contributions made from 1 July 2017 onward count. Specifically:

• Concessional — salary sacrifice, or personal deductible contributions you claim as a tax deduction. These are the most tax-efficient.
• Non-concessional — after-tax contributions from your own money. Less tax benefit, but still useful if you've hit the concessional cap.

What does not count:

• Employer Superannuation Guarantee (SG) contributions — the 11.5% your boss pays automatically.
• Spouse contributions into your account (they may get a spouse tax offset, but don't count here).
• Government co-contributions.
• Downsizer contributions.

On release, 85% of concessional contributions plus 100% of non-concessional contributions can come out, along with associated earnings.

Who's eligible

Four tests, all required:

1. Age — you must be 18 or older when you request the FHSS determination from the ATO. Contributions made before you turned 18 still count.
2. First home buyer — you must never have owned property in Australia. That includes investment property, vacant land, commercial, or a share of a family home. Overseas property ownership does not disqualify you.
3. Intention to live in it — you must intend to occupy the property as your principal place of residence for at least 6 of the first 12 months after it's practical to move in.
4. Property type — it has to be a residential property located in Australia. Vacant land qualifies only if you're buying land and building a home, with a signed building contract.

One important note: eligibility is per person, not per couple. Each partner is assessed individually, so if one of you has previously owned property in Australia, the other can still apply on their own.

The release process, step by step

1. Make voluntary contributions over one or more financial years, within the caps above.
2. Request an FHSS determination from the ATO online via myGov. The ATO calculates how much is eligible to be released, including associated earnings. You can request this before you start house-hunting — it doesn't lock you in.
3. Request the release — only once you're ready. The ATO releases the funds from your super within about 15-25 business days.
4. Sign a property contract within 12 months of the release request. If you need longer, apply to the ATO for a 12-month extension before the 12 months run out.
5. Notify the ATO within 28 days of signing the contract.

Use our Borrowing Power Calculator to size up a realistic purchase price before you release the funds — once you pull the money, the clock is ticking.

Tax on the released amount

The released amount has two components:

• Concessional contributions and associated earnings — taxed at your marginal tax rate, less a 30% FHSS tax offset. The fund withholds tax at a default rate when the release is processed.
• Non-concessional contributions — not taxed again on release.

Associated earnings are not your actual super investment returns. The ATO uses a fixed formula: the Shortfall Interest Charge rate (the 90-day Bank Accepted Bill rate plus 3%), compounded daily from the start of the financial year each contribution was made. In practice this has hovered around 7-8% p.a. since 2024.

Five traps to avoid

1. Missing the concessional cap. The general concessional cap is $30,000 for 2024-25 onwards (includes SG and salary sacrifice combined). If your employer's SG already fills most of it, your FHSS-eligible salary sacrifice headroom is smaller than you think. Check your super statement before you plan $15,000 of contributions.
2. Forgetting to claim the deduction. If you make a personal contribution (not salary sacrifice), you must lodge a Notice of Intent with your fund before you claim the deduction on your tax return. Miss the deadline and the contribution counts as non-concessional, with less tax benefit.
3. Releasing before you're ready to buy. Once you request release, you've got 12 months (plus a possible 12-month extension) to sign a contract. If you don't, you must either recontribute the amount to super or keep the money and pay a flat 20% tax on it.
4. Pooling with a partner who owned property. If your partner has previously owned property in Australia, they're not eligible — but you still are. You can buy the home in both names; you just apply for FHSS release on your own portion only.
5. Assuming the scheme works for investments. FHSS is strictly for a home you're going to live in. Buying an investment property with released FHSS funds breaches the scheme and the ATO will tax the released amount at the 20% rate.

Worked example

Sophie, 28, on a $110,000 salary (37% marginal rate). She salary sacrifices $15,000 a year for three years — total voluntary contributions $45,000.

• Tax saved on contributions (vs saving post-tax): roughly (37% - 15%) × $45,000 = $9,900 across the three years.
• Associated earnings accrue at the ATO formula rate — say $3,500 across the period.
• Release amount = 85% × $45,000 concessional + associated earnings ≈ $41,750.
• Tax on release: at 37% marginal rate less 30% FHSS offset, the net rate on the concessional portion is around 7%. Withholding ≈ $2,900.
• Net deposit boost: about $38,800 of usable deposit cash that would have cost her closer to $30,000 if she'd saved it in a regular bank account after tax.

The numbers are a simplification — the actual calculation depends on your exact marginal rate, fund investment returns, and the date each contribution was made. But the direction is consistent: for eligible first home buyers, FHSS beats a savings account.

FHSS vs the other first home buyer schemes

FHSS stacks with the other major schemes, not instead of them:

• Help to Buy (shared equity, launched December 2025) reduces the loan you need. Use FHSS for the deposit, Help to Buy for the equity share. See our Help to Buy Scheme Guide.
• First Home Guarantee lets you buy with a 5% deposit without LMI. FHSS builds that 5% inside super at the 15% tax rate.
• State FHOG and stamp duty concessions are separate eligibility tracks — covered in our First Home Buyer Programs guide.

The bottom line

FHSS isn't a loophole — it's a legislated tax break that most eligible first home buyers should at least model. The usable benefit is biggest for people on the 30% or 37% marginal rate who can commit voluntary contributions for more than a year before buying. If you're within a few months of settlement, the tax advantage is still there but the associated-earnings runway is shorter.

The one rule: never request a release until you're genuinely close to buying. The 12-month clock is the sharpest edge of this scheme.

Model your deposit timeline: Deposit Savings Calculator · Check borrowing capacity: Borrowing Power Calculator · Estimate stamp duty: Stamp Duty Calculator.

Further reading: Help to Buy Scheme 2026 · First Home Buyer Programs 2026 · First Home Buyer Guide Australia.

Sources: Australian Taxation Office — First home super saver scheme; ATO Shortfall Interest Charge rates; ATO concessional contributions caps 2024-25. This article is general information — not tax or financial advice. Verify specifics with a registered tax agent or licensed financial adviser before acting.