The First Home Super Saver scheme, explained

Saving a deposit is usually the hardest part of buying your first home. The First Home Super Saver (FHSS) scheme lets you use your superannuation to get there faster, with some tax benefits along the way. Here's how it works, in plain English.

What is the First Home Super Saver scheme?

The FHSS scheme lets you make voluntary contributions into your super fund, then withdraw those contributions (plus deemed earnings) later to help fund a deposit on your first home.

• It's built around voluntary contributions, salary sacrifice or personal contributions you choose to make on top of your employer's compulsory super.
• Because these contributions are usually taxed at the concessional super rate rather than your marginal income tax rate, the scheme can be tax-effective for many first-home buyers.
• It's not a separate savings account. Your money still sits inside your normal super fund, the scheme simply gives you a legal pathway to take some of it out early for a first home.

To use it, you generally need to be 18 or over, have never owned property in Australia before, and intend to live in the home you buy.

How the caps work

The government sets limits on how much you can contribute and withdraw under FHSS. As a rough guide (always verify current figures):

• You can generally contribute up to roughly $15,000 per financial year towards the scheme.
• There's a total cap of around $50,000 per person across all years.
• Couples can often combine two individual caps, potentially doubling the amount available for a joint deposit.
• Withdrawals include a deemed rate of earnings on top of your contributions, calculated by the ATO, not just what you put in.

These numbers move with policy changes, so treat them as indicative until Scott or the ATO confirms the current figures for your situation.

Who the scheme suits

FHSS tends to work best for people who:

• Have a steady income and can comfortably direct some pay into super without straining day-to-day cashflow.
• Have enough time before buying, since building a meaningful FHSS balance usually takes more than a few months.
• Intend to live in the property they buy, since FHSS is designed to support a home you move into rather than a straight investment purchase.

If you're also weighing up rentvesting (buying an investment property in an affordable area while renting where you actually want to live), it's worth having that conversation before you start directing extra money into FHSS. The scheme is built around a home you intend to occupy, so the two strategies can pull in different directions. Scott can help you weigh both paths against your goals.

Using FHSS alongside your deposit

FHSS is usually one piece of a deposit, not the whole thing. Many first-home buyers pair it with:

• Everyday savings held outside super.
• Help from family, such as a gifted contribution or a guarantor arrangement.
• Government schemes like the 5% Deposit Scheme and Help to Buy, where eligible.

Because FHSS withdrawals can take some weeks to process, most buyers start the withdrawal request well before they need the funds, rather than waiting until they've found a property.

The withdrawal process, step by step

• 1. Check your eligibility and how much you have available to withdraw through the ATO's online services.
• 2. Apply for an FHSS determination before you sign a contract, so you know exactly what you can access.
• 3. Once you have a contract (or are close to one), request the actual release of funds through the ATO.
• 4. The ATO releases the money to you, generally within a few weeks, after withholding any tax owing.
• 5. You then have a set window to use the funds towards your deposit or roll them back into super if your purchase falls through.

Every first-home buyer's situation is different, and the FHSS caps and rules can shift with policy updates. If you'd like to work out whether the scheme suits you, and how it might fit alongside other deposit options, book a free discovery call with Scott at koala financial.

Frequently asked questions

Official details, including current caps and eligibility, are on the First Home Super Saver scheme website.