First Home Super Saver (FHSS): Save a Home Deposit in Your Super

Short answer

The First Home Super Saver (FHSS) scheme lets first home buyers save a home deposit inside their super and pay less tax along the way. You make voluntary contributions, claim a tax deduction on some of them, and then withdraw up to $50,000 (plus earnings) when you're ready to buy.

What is the FHSS scheme?

Buying your first home feels impossible when your savings account grows a few percent a year. The First Home Super Saver (FHSS) scheme is the government's way of letting you use the tax-friendly environment of super to save faster.

Here's the simple version:

1. You make voluntary contributions to your super (before-tax or after-tax).
2. You can claim a tax deduction on before-tax contributions, so less of your pay goes to the tax office.
3. When you're ready to buy, you apply to withdraw up to $50,000 of contributions plus earnings.
4. The money goes toward your first home deposit.

The whole idea: because super is taxed more gently than your take-home pay, your deposit can grow a little faster than it would in a regular savings account.

How much can you save?

The numbers are simpler than they sound:

You don't have to hit the maximum. Even contributing a few thousand a year through salary sacrifice or a one-off deposit can make a real difference over two or three years.

A worked example (with real numbers)

Let's say Mia earns $90,000 a year and wants to save for a first home. Her marginal tax rate is 32.5% (plus the 2% Medicare levy).

Saving in a regular bank account:

• She saves $10,000 of after-tax income.
• To have $10,000 in her pocket, she needed to earn roughly $15,300 before tax.
• The ATO already took about $5,300.

Saving through FHSS (salary sacrifice):

• She salary sacrifices $10,000 into super.
• Inside super, it's taxed at just 15%, so $8,500 lands in her super.
• When she withdraws it later, it's taxed at her marginal rate minus a 30% offset — roughly 2% to 7% in total, far less than the 32.5% she'd have paid on the way in.

The result: more of her hard-earned money ends up in her deposit, not with the tax office.

Who is the FHSS scheme for?

The scheme suits people who:

• Are saving for a first home and haven't owned property before.
• Are happy to lock money away in super for a year or two until they're ready to buy.
• Want to pay less tax on their savings.

It's less suited to people who:

• Might need the money for something else soon — once it's in super, it stays there until you apply to withdraw it for a home.
• Already own (or have owned) a home or investment property.

How to use the FHSS scheme, step by step

1. Check your eligibility — 18+, no previous Australian property ownership (with a few exceptions).
2. Make voluntary contributions — salary sacrifice through your employer, or personal after-tax contributions (and claim a deduction if you're eligible).
3. Request a determination through your myGov / ATO account to see your maximum withdrawal amount.
4. Request release when you've found a home, then you have 12 months to sign a contract.

A quick tip: before you contribute, request a determination so you know exactly how much headroom you have — it's free and takes a few minutes.

Things to watch out for

• Timing: your FHSS withdrawal request must happen before you sign a contract, and you have 12 months from release to sign (extensions are possible).
• You don't have to use it: if your plans change and you no longer buy a home, the money simply stays in your super — you can't withdraw it as cash for other purposes.
• Determination first: check your eligibility and maximum amount before you commit, so there are no surprises later.

Is it worth it?

For most first home buyers, yes — the tax saving alone is hard to beat. The trade-off is that your money is tied up in super until you withdraw it for a home.

If you're a couple, you can both use the scheme, which effectively doubles the benefit: up to $50,000 each, or $100,000 combined toward your deposit.

The bottom line: the FHSS scheme is one of the cleanest tax breaks available to first home buyers. If you're saving for a first home and can afford to lock the money away for a year or two, it's worth a serious look.