The First Home Super Saver Scheme is an ATO-administered scheme that lets first home buyers release voluntary super contributions, plus deemed earnings, towards a home deposit. Up to $15,000 of contributions per financial year can count, with a $50,000 total limit per person.
For a broker, the practical question is when that money becomes available. A determination shows the maximum release amount, but the exchange deposit needs cash available by the contract’s deadline.
What is the First Home Super Saver Scheme?
Eligible buyers use the First Home Super Saver (FHSS) scheme to save inside super before applying to the Australian Taxation Office (ATO) for release. You may also see it called FHSSS or the first home buyer super saver scheme.
FHSS is a calculation administered by the ATO within your existing super arrangements. Your fund does not open a separate FHSS account or ring-fence those contributions. The ATO calculates eligible contributions and associated earnings when you request a determination.
The contribution limits apply before the release calculation. Of eligible contributions within those limits, 85% of concessional contributions and 100% of non-concessional contributions can be released, plus associated earnings. Employer super guarantee contributions remain in super. The ATO’s FHSS rules explain what counts.
Who is Eligible for FHSS
To request an FHSS determination, you must be at least 18 and meet the first home buyer requirements. Eligible contributions can include amounts paid before you turned 18.
You must satisfy these conditions:
- You have never held a relevant property interest in Australia, unless the ATO accepts an FHSS financial hardship application.
- You have no earlier completed FHSS release. A withdrawn request or revoked release authority can have different treatment under the ATO rules.
- Your name will be on the property’s title.
- You intend to occupy the home as soon as practicable and live there for at least six of the first 12 months after occupation becomes practicable.
Previous property ownership includes investment property, vacant land and commercial property. A financial hardship exception requires the ATO’s decision and evidence connecting the hardship to the loss of all property interests.
Eligibility is individual. Both partners can use their own FHSS amounts for one home if each qualifies. One partner’s earlier ownership does not automatically disqualify the other.
Can You Use FHSS for an Investment Property?
No, FHSS cannot fund a property you intend to hold solely as an investment without meeting the occupancy requirement. The intention to live there must be genuine. Failing the purchase or notification conditions can trigger extra FHSS tax of 20% of the assessable released amount. The ATO’s FHSS ruling explains the conditions.
How Contributions and the FHSS Determination Work
Voluntary salary sacrifice and personal deductible contributions can count as concessional contributions. Personal after-tax contributions without a deduction can count as non-concessional contributions. Mandatory employer super guarantee payments do not count.
The FHSS limits sit within the normal super contribution caps. Using unused concessional cap amounts does not increase the FHSS annual limit. Use the date your fund receives a contribution when allocating it to a financial year, rather than the payslip date.
An FHSS determination states the maximum releasable amount and its components. Request it through ATO online services in myGov, under Super, Manage, then First home saver. Check pre-filled contributions against fund records and correct their type and receipt dates before submitting.
You need a determination before requesting release, and you must request the determination before property ownership transfers to you. An estimate used while saving does not authorise a withdrawal. For an official calculation based on your contributions, use the ATO’s determination process.
Associated earnings, often called deemed earnings, use the ATO’s shortfall interest charge rate. They do not equal your fund’s actual investment return. A planning calculator therefore needs assumptions about contribution dates and rates, while the determination applies the scheme’s calculation to your recorded contributions.
FHSS Release and Timing Against the Contract
The release sequence starts with a determination and ends when the ATO pays the buyer. Allow processing time before promising that FHSS will cover a contractual payment.
- Request and receive the determination. Resolve contribution errors before moving to release.
- Submit the release request to the ATO using that determination.
- The ATO issues a release authority to the super fund, which pays the requested amount to the ATO.
- The ATO withholds tax and applies any relevant Commonwealth debt offsets before paying the balance to the buyer.
The ATO estimates that receipt of the money takes 15 to 20 business days in most cases after a release request. That estimate covers both transfers, from the fund to the ATO and then to the buyer. A broker needs extra time for errors or delays before settlement.
Under the current determination rules, you can request release within 90 days after signing a purchase or construction contract. You generally have 12 months after the release request to sign a contract. The ATO can extend this by another 12 months and generally grants the extension without an application.
Notify the ATO within 90 days after signing. Older determinations have shorter post-signing periods, so use the ATO’s contract and notification rules for the determination you hold.
For the loan file, record exchange and settlement separately. If the exchange deposit is due before FHSS reaches the bank, the buyer needs other available funds for that payment. Include the net FHSS proceeds in the settlement funds calculation only after allowing for tax and debt offsets.
For example, a buyer with a deposit payable on signing cannot rely on a release requested that day. Their broker must establish how the signing payment will be funded and whether FHSS will arrive before settlement.
How FHSS Releases Are Taxed
Released concessional contributions and all associated earnings form the assessable FHSS released amount. The buyer includes that amount in their tax return and receives a 30% tax offset. Released non-concessional contributions themselves are not assessable. Their associated earnings form part of the assessable release.
The ATO generally withholds using the expected marginal tax rate, including Medicare levy, less the offset. Withholding is 17% if it cannot estimate that rate. The final tax calculation occurs through the tax return for the year of the release request, which can differ from the payment year.
If you do not buy within the allowed period, you can recontribute the assessable released amount less tax withheld as a non-concessional contribution. You cannot claim a deduction for that recontribution. The alternative is an extra 20% FHSS tax on the assessable released amount, in addition to ordinary release tax.
Recontribution and notification have their own deadlines. Record them with the contract deadline and any extension the ATO grants. The ATO’s release guidance sets out these obligations.
How Lenders Treat Released FHSS Amounts
FHSS proceeds can supply purchase funds, but genuine savings acceptance depends on the lender’s credit policy. An ATO determination establishes a release calculation. It does not establish that a lender accepts the money as genuine savings or that the full amount is already available.
Before relying on FHSS, confirm each shortlisted lender’s broker policy. Assemble the determination and release confirmation, then the bank statement showing receipt. Retain contribution records if the lender requires evidence of how the savings accumulated. Our genuine savings guide explains the separate savings assessment.
Salary sacrifice reduces take-home pay. Enter it accurately in the lender’s serviceability calculation and confirm the policy for voluntary contributions. If a client plans to stop sacrificing, document the arrangement and any evidence the lender needs before using a higher net income.
FHSS can sit alongside the 5% Deposit Scheme because one releases your savings and the other supports an eligible low-deposit loan. Each scheme has its own eligibility conditions.
The First Home Owner Grant can add funds where the buyer and property qualify. State duty concessions can reduce purchase costs. Include the actual grant payment timing and any remaining stamp duty in the settlement calculation.
FHSS Pros and Cons With a Worked Example
FHSS can leave a buyer with more deposit money through concessional tax treatment and deemed earnings. It also restricts access to the contributed money and adds release administration to the purchase timetable.
A higher-income earner can gain more from the gap between their marginal rate and super contribution tax. A buyer purchasing within months needs to weigh that saving against the contribution receipt and release timetable. Keeping the exchange deposit outside super can avoid a cash shortfall.
If you abandon the home purchase before releasing FHSS, the contributions generally stay in super until another condition of release applies. The annual limit also means a large last-minute contribution cannot all count towards FHSS.
Illustrative Salary Sacrifice Example
Assume a buyer salary sacrifices $10,000 in each of three financial years. Each contribution stays within their normal super caps. Assume 15% contributions tax, a 32% marginal rate including Medicare levy throughout and $2,000 of ATO-calculated associated earnings at determination.
The $2,000 is an illustration, not a quoted earnings rate or forecast. Actual deemed earnings depend on contribution dates and the applicable shortfall interest charge rates.
| Calculation | Amount |
|---|---|
| Total salary sacrifice contributions | $30,000 |
| Contributions eligible for release at 85% | $25,500 |
| Assumed associated earnings | $2,000 |
| Assessable release before withholding | $27,500 |
| Assumed release tax at 32% less the 30% offset | $550 |
| Net amount received | $26,950 |
Taking that same $30,000 as salary would leave $20,400 after tax at the assumed 32% rate, before bank interest. On these assumptions, FHSS produces $6,550 more for the deposit. The example excludes fund fees and other tax effects, and assumes no Commonwealth debt offsets.
FHSS is worth considering when you qualify, expect to buy a home to live in and can manage the restricted access. A short purchase timetable makes release timing a deciding factor, even where the tax calculation is favourable.
How to Apply for FHSS
Apply through ATO online services linked to myGov after making eligible contributions. There is no separate FHSS savings account to open.
- Confirm eligibility and arrange voluntary contributions with your employer or super fund. Track the amounts your fund actually receives.
- In myGov, open ATO online services, then Super, Manage and First home saver. Request a determination and check every contribution against the fund’s records.
- Request release using the determination. Record the release request date and keep the confirmation for your broker.
- Reconcile the payment received with the ATO’s tax withholding and any debt offsets. Update the funds available for exchange and settlement.
- After signing the contract, notify the ATO through First home saver within the applicable period. Keep that confirmation with the contract.
Before committing to a purchase payment, give your broker the release documents and the contract’s payment deadlines. The funds schedule must show how each payment will be covered when it falls due.
