Saving a deposit from your take-home pay is slow, partly because you're saving with money that's already been taxed at your marginal rate. The First Home Super Saver scheme (FHSS) lets you save some of your deposit inside super instead, where contributions are taxed more lightly.
For the right person, it can add thousands of dollars to a deposit. For the wrong timing, it can delay settlement. Here's how to use it properly.
How FHSS works
You make voluntary contributions to your super fund, then later ask the ATO to release them (plus deemed earnings) to help buy your first home.
- Annual limit: up to $15,000 of voluntary contributions per financial year count towards FHSS
- Total limit: up to $50,000 per person
- Couples: each person has their own limit, so a couple could access up to $100,000 between them
Compulsory employer super (the superannuation guarantee) doesn't count. Only extra contributions you choose to make.
Two ways to contribute
Salary sacrifice (before tax). Your employer pays part of your salary into super before income tax. It's taxed at 15% in the fund instead of your marginal rate, which for most workers is 30% or more plus Medicare levy.
Personal contributions (after tax). You transfer money from your bank account into super. If you claim a tax deduction for it, it's treated like a concessional contribution. If you don't, it's a non-concessional contribution.
Concessional contributions count towards your annual concessional cap, so check your total before you set up a large salary sacrifice.
Why it can beat a savings account
Say you earn $95,000 and salary sacrifice $10,000 a year into super for FHSS.
- Through payroll, that $10,000 is taxed at 15% in the fund, leaving $8,500
- If you'd taken it as pay, at a 30% marginal rate plus 2% Medicare, you'd keep about $6,800
That's roughly $1,700 more towards your deposit each year, before earnings. When it's released, the withdrawal is taxed at your marginal rate less a 30% offset, so you keep most of the advantage.
The exact benefit depends on your income, so it's worth running your own numbers or speaking to your accountant.
The timing trap
This is where people get caught.
You must request an FHSS determination from the ATO before you sign a contract, or within 14 days of signing. Then you request the release. The ATO and your fund need time to process it, often a few weeks.
If your deposit is due when you exchange contracts, the money might not arrive in time. Common workarounds:
- Request the release before you start house hunting, so the money's in your account when you need it
- Use other savings for the initial deposit and FHSS funds at settlement
- Ask your conveyancer about a smaller initial deposit or a deposit bond
Once funds are released, you generally have 12 months to sign a contract to buy (with extensions available).
Who it suits
FHSS tends to suit you if:
- You're 1–3 years away from buying
- You earn enough that the tax saving is meaningful
- You're disciplined enough not to need the money for anything else
It's less useful if you plan to buy within a few months, because there's limited time to contribute and the release process takes time.
Combining FHSS with other help
You can generally use FHSS with:
- The 5% Deposit Scheme
- Help to Buy
- State stamp duty concessions and the First Home Owner Grant
For example, a couple who each release $30,000 via FHSS would have $60,000, which covers a 5% deposit on a $1.2 million Sydney home under the 5% Deposit Scheme.
What lenders think of FHSS money
Most lenders treat released FHSS funds as genuine savings, because you built them up over time through contributions. Keep your super statements and the ATO release paperwork. We'll include them in your application.
Frequently asked questions
Can I use FHSS if I've owned property before?
Generally no, unless you've suffered financial hardship and the ATO grants an exception. It's designed for people who've never owned property in Australia.
Can I withdraw my employer's compulsory super?
No. Only voluntary contributions count, plus associated earnings calculated by the ATO.
What if I don't end up buying?
You can recontribute the amount to super, or keep it and pay a flat 20% FHSS tax. Talk to your accountant before releasing funds if you're unsure.
Planning to use FHSS and want to time it right with your pre-approval? Call Finfident on 0424 545 654. We'll map out when to request the release so it lands when you need it.
This article is general information only and doesn't take into account your objectives, financial situation or needs. Figures, rates and scheme rules are current as at October 2026 and can change. Finfident Finance Brokers (ABN 94 679 280 801) is Credit Representative 569374 of Outsource Financial Pty Ltd (ACN 131 090 705), Australian Credit Licence 384324.