Saving for a house deposit is the single biggest financial hurdle most first home buyers face. You need $60,000, $80,000, sometimes $120,000 or more — all while paying rent, living your life, and watching property prices climb.
But there is a government scheme that most Australians either do not know about or do not fully understand — and it can put you thousands of dollars ahead. It is called the First Home Super Saver Scheme (FHSS), and it lets you use your superannuation fund to save for a home deposit with significant tax advantages.
In this guide we explain exactly how the FHSS works in 2026, show you the real numbers on how much you can save, walk through the withdrawal process step by step, cover the couples strategy for combining $100,000, and flag the common mistakes that trip people up.
What Is the First Home Super Saver Scheme (FHSS)?
The First Home Super Saver Scheme is an Australian Government initiative, administered by the ATO, that allows first home buyers to make voluntary contributions into their superannuation fund, then withdraw those contributions (plus deemed earnings) to use as a home deposit.
The FHSS scheme was launched on 1 July 2017 and has been expanded since then. The lifetime cap was increased from $30,000 to $50,000 in July 2022. As of 2026, you can contribute up to $15,000 per financial year and withdraw a maximum of $50,000 in total (plus deemed earnings) to put towards your first home.
The key benefit is tax. When you salary sacrifice into super, your contributions are taxed at just 15% — the standard superannuation contributions tax rate. If you are earning a typical first home buyer salary of $70,000 to $100,000, your marginal tax rate is 30% to 37% (plus the 2% Medicare levy). That means every dollar you route through super instead of your bank account saves you 15 to 22 cents in tax. Over two to three years of contributions, that adds up to thousands of dollars.
When you withdraw, the ATO applies a 30% tax offset to the withdrawal amount, which further reduces the tax you pay. The net effect is that you end up with significantly more money for your deposit compared to saving the same gross amount in a regular bank account.
It is not free money — it is your own money, saved smarter.
FHSS Contribution Limits 2026
Understanding the FHSS contribution limits is critical to maximising your savings. Here are the current caps for 2026:
- Annual limit: $15,000 per financial year in eligible voluntary contributions
- Lifetime maximum: $50,000 in total eligible contributions (increased from $30,000 on 1 July 2022)
- Concessional cap interaction: Your FHSS contributions count towards the overall $30,000 concessional contributions cap (from 1 July 2024), which includes your employer's super guarantee (SG) payments
This cap interaction is important. If your employer contributes $12,000 per year in SG, you have $18,000 of concessional cap remaining — but only $15,000 of that can count towards FHSS. Here is what a three-year FHSS savings plan looks like:
| Financial Year | FHSS Contribution | 15% Tax | Net in Super | Running Total |
|---|---|---|---|---|
| 2024-25 | $15,000 | $2,250 | $12,750 | $12,750 |
| 2025-26 | $15,000 | $2,250 | $12,750 | $25,500 |
| 2026-27 | $15,000 | $2,250 | $12,750 | $38,250 |
After three years you have $38,250 in net contributions, plus deemed earnings calculated by the ATO (based on the 90-day bank bill rate plus 3%). With deemed earnings, your total withdrawal after three years is typically $40,000 to $42,000.
To reach the full $50,000 lifetime cap, you need to contribute $15,000 per year for three years ($45,000) plus a partial fourth year ($5,000). Most buyers contribute for 3 to 4 years before withdrawing.
How Much Can You Save with FHSS? — Worked Example
Let us run through a realistic worked example so you can see the actual dollar savings compared to a regular bank account.
Scenario: Single person earning $90,000, salary sacrificing $15,000/year for 3 years
Without FHSS — saving in a bank account:
You want to save $15,000 per year from your pre-tax salary. At a marginal tax rate of 30% plus 2% Medicare levy, you pay $4,800 in tax on that $15,000 and take home $10,200. Over three years, you save $30,600 in your bank account (ignoring interest).
With FHSS — saving through super:
You salary sacrifice $15,000 per year into your super fund. The contribution is taxed at just 15% ($2,250), leaving $12,750 in your super. Over three years, you have $38,250 in contributions plus deemed earnings. When you withdraw, the ATO taxes the amount at your marginal rate minus a 30% offset. The net result after three years is approximately $40,000 to $42,000.
Tax saving: ~$5,100 per year. Over three years, the FHSS puts you roughly $10,000 to $12,000 ahead compared to saving the same gross amount in a bank account. You saved the same pre-tax dollars — the difference is entirely tax savings.
The higher your marginal tax rate, the bigger the benefit. Someone earning $150,000 (37% bracket) saves even more — around $6,300 per year in tax through FHSS compared to bank savings.
FHSS for Couples — How to Combine $100,000
This is one of the most powerful aspects of the FHSS scheme, and many first home buyers do not realise it: each person in a couple can independently access their own $50,000, for a combined total of $100,000 towards your deposit.
Here is how it works for a couple both earning $80,000:
- Each partner contributes $15,000 per year via salary sacrifice
- Each can withdraw up to $50,000 in contributions (plus deemed earnings)
- Over three years, their combined FHSS withdrawals total approximately $80,000 to $84,000 — compared to roughly $61,000 saving outside super
- That is over $20,000 in combined tax savings as a couple
For many first home buyers, $20,000 is the difference between a 10% deposit and a 15% deposit — which can mean avoiding Lenders Mortgage Insurance (LMI) entirely and saving another $15,000 to $30,000.
Key rules for couples:
- Both must meet eligibility individually — each person is assessed on their own
- If one partner has previously owned property, the other can still use FHSS (provided they have never owned property themselves)
- No requirement to be married or de facto — each person's FHSS access is entirely independent
- Both can buy together — you can combine your FHSS withdrawals into the same property purchase
If you are buying as a couple, make sure both of you are contributing to FHSS. Leaving one partner's $50,000 entitlement on the table is the most common missed opportunity we see.
FHSS Eligibility — Who Can Use the Scheme?
The FHSS eligibility criteria are straightforward, but there are requirements that catch people off guard:
- You must be at least 18 years old at the time you request a determination or release from the ATO.
- You must never have owned property in Australia. This includes investment properties, holiday homes, commercial property, and vacant land. If you have owned any real property in Australia — even if you never lived in it — you are not eligible.
- You must not have previously requested a release of FHSS amounts. You get one shot at this scheme. If you withdrew FHSS money for a previous purchase attempt that fell through, you cannot use the scheme again (though you can recontribute and avoid the penalty tax).
- The property must be residential and in Australia. You must intend to live in it for at least 6 of the first 12 months after settlement. It cannot be used for investment properties.
- Only voluntary contributions count. Your employer's mandatory super guarantee (SG) contributions cannot be withdrawn under the FHSS. Only salary sacrifice contributions, personal deductible contributions, and voluntary after-tax contributions qualify.
Eligibility is assessed per person, not per household. Both individuals in a couple can each access the FHSS independently — there is no restriction on combined claims.
How to Withdraw Your FHSS Savings — Step by Step
The FHSS withdrawal process involves several steps and multiple interactions with the ATO. Getting the order wrong can cost you your eligibility. Here is exactly what to do:
Step 1: Lodge a Notice of Intent to Claim (if making personal contributions)
If you made personal after-tax contributions and want to claim them as a tax deduction, you must lodge a Notice of Intent to Claim with your super fund before requesting your FHSS determination. If you skip this step, those contributions will not be treated as concessional and you lose the tax benefit. This step is not needed if you salary sacrificed — your employer handles that.
Step 2: Request an FHSS determination from the ATO
Log into myGov and navigate to the ATO's FHSS section. Request a "determination" — this tells you the maximum amount you can withdraw based on your eligible contributions and deemed earnings. Processing time is typically 10 to 15 business days.
Critical: Do NOT sign a property contract before getting your determination. Signing first can make you ineligible for the scheme.
Step 3: Request a release of your FHSS amounts
Once you have your determination and you are ready to proceed, submit a "release request" through myGov. The ATO will instruct your super fund to release the specified amount.
Step 4: Wait for funds (15–25 business days)
Your super fund has 10 business days to transfer the money to the ATO. The ATO then deducts withholding tax and sends the remaining amount to your nominated bank account. Total processing time from release request to money in your account is typically 15 to 25 business days — but during peak periods (January to March) it can stretch to 8 weeks.
Step 5: Sign your property contract within 12 months
You must sign a contract to purchase or build your first home within 12 months of requesting the release. If you need more time, you can apply to the ATO for a 12-month extension — but extensions are at the Commissioner's discretion.
Step 6: Notify the ATO within 28 days
Once you have signed a contract, you must notify the ATO within 28 days. This is a legal requirement. If you do not buy a home, you must either recontribute the amount back into super or pay a flat 20% tax on the withdrawn amount.
Total timeline tip: Allow a minimum of 6 to 8 weeks from requesting the release to receiving the funds in your bank account. If you are planning to bid at auction, submit your release request well in advance so the money is sitting in your account when you need it.
FHSS Tax Treatment — How Much Tax Do You Pay?
The FHSS has a specific tax treatment that differs depending on the type of contribution:
Concessional contributions (salary sacrifice or personal deductible)
Going in: Taxed at 15% as contributions tax in your super fund.
Coming out: Included in your assessable income but you receive a 30% tax offset. Effectively, you pay your marginal tax rate minus 30% on the withdrawal. For someone on a 32% marginal rate, the effective tax on withdrawal is just 2%.
Non-concessional contributions (voluntary after-tax, no deduction claimed)
Going in: No tax — you have already paid income tax on this money.
Coming out: No tax — the contribution amount is returned tax-free.
Deemed earnings
The ATO calculates deemed earnings on your contributions using the 90-day bank bill rate plus 3% (currently around 7.3% combined). These deemed earnings are taxed at your marginal rate minus the 30% offset — the same treatment as concessional contributions.
The net effect is that the FHSS consistently delivers a better after-tax result than saving in a bank account, regardless of which contribution type you use. Concessional contributions provide the biggest tax advantage because they benefit from both the 15% going in and the 30% offset coming out.
Salary Sacrifice vs Personal Contributions for FHSS
There are two ways to make concessional contributions under the FHSS. Both achieve the same tax result, but they work differently in practice:
Salary sacrifice
Your employer deducts contributions from your pre-tax salary and sends them to your super fund. Simple to set up — just talk to payroll. However, the timing depends on your employer's payment cycle, and some employers only remit super quarterly.
Personal contributions with tax deduction
You make after-tax contributions directly to your super fund from your bank account, then lodge a Notice of Intent to Claim a Tax Deduction with your fund. You claim the deduction when you lodge your tax return. This gives you full control over timing and amounts.
Our recommendation for FHSS: Personal contributions with a tax deduction. The reason is control. With salary sacrifice, your employer may not process changes immediately, and quarterly SG timing can create confusion about which financial year a contribution falls in. With personal contributions, you can make a lump sum contribution on 28 June and know exactly which year it counts towards. This is important when you are trying to maximise the $15,000 annual FHSS limit.
Whichever method you choose, keep records of every contribution and make sure your super fund categorises them correctly. Errors here can mean contributions are not eligible for FHSS withdrawal.
Common FHSS Mistakes to Avoid
The FHSS scheme is powerful, but it comes with traps that can cost you money or derail your purchase. These are the mistakes we see most often:
1. Signing a contract BEFORE getting your determination
This is the most damaging mistake. If you sign a property contract before requesting your FHSS determination from the ATO, you may be deemed ineligible for the scheme. Always get your determination first, then sign.
2. Exceeding the $15,000 annual limit
If you contribute more than $15,000 in FHSS-eligible contributions in a single financial year, the excess does not count towards FHSS. It stays in your super but cannot be withdrawn for your home. Track your contributions carefully — especially if your employer's SG timing is irregular.
3. Not lodging a Notice of Intent to Claim
If you made personal after-tax contributions and want to claim them as concessional (tax-deductible), you must lodge a Notice of Intent with your super fund before requesting your FHSS determination. Miss this step and those contributions are treated as non-concessional — you lose the 15% tax advantage on the way in.
4. Forgetting to notify the ATO within 28 days of signing
After you sign a contract, you have 28 days to notify the ATO. Failing to do so can result in penalties. Set a calendar reminder the day you sign.
5. Not factoring in processing time
The FHSS release takes 15 to 25 business days in standard conditions — but during January to March peak season, it can blow out to 8 weeks. If you are bidding at auction, you need the money in your account before auction day. Submit your release request at least 8 weeks before any deadline.
6. Breaching the $30,000 concessional cap
Your FHSS contributions count towards the $30,000 overall concessional contributions cap. If your employer's SG is $12,000 and you salary sacrifice $15,000 for FHSS, you have used $27,000 of the cap. Add any other salary sacrifice arrangements and you could exceed the cap, triggering excess contributions tax. Check your total concessional contributions each year.
FHSS vs Saving Outside Super
Should you use the FHSS or just save in a regular high-interest savings account? Here is a direct comparison:
| Factor | FHSS (via super) | Regular savings |
|---|---|---|
| Tax on contributions | 15% (super rate) | Your marginal rate (30–37% + Medicare) |
| Access to funds | Must apply to ATO — 4 to 8 weeks processing | Instant access |
| Flexibility | Must buy within 12 months of withdrawal or face penalty | No restrictions — save and buy whenever you are ready |
| Maximum contribution | $15,000/year, $50,000 total | Unlimited |
| Tax saving (on $45,000 over 3 years) | ~$10,000 to $12,000 | $0 |
| Investment returns | Deemed return (90-day bill rate + 3%) | Depends on account (typically 4–5% HISA) |
| Risk | Locked process, ATO delays possible | No risk — your money, your timeline |
Our recommendation: If you are in the 30% tax bracket or above and you are fairly certain you will buy within the next 2 to 4 years, the FHSS is almost always worth it. The $10,000+ in tax savings is real money that accelerates your deposit timeline significantly. But keep some savings outside super as well — you need accessible funds for costs like building inspections, legal fees, and moving expenses that the FHSS money cannot cover until it is released.
If you are not sure how much deposit you actually need, work that out first. Then use the FHSS to get there faster.
Stacking FHSS with Other Schemes
The FHSS works alongside other first home buyer programs — you do not have to choose one or the other. Here are the most powerful combinations:
- FHSS + First Home Guarantee (FHG): Use FHSS to build your 5% deposit, then use the First Home Guarantee to buy with just 5% deposit and no LMI. Combined, you could buy a home with as little as 2–3 years of FHSS contributions.
- FHSS + First Home Owner Grant (FHOG): In most states, the FHOG ($10,000 in WA for new builds) stacks on top of your FHSS savings. Check your state's grants here.
- FHSS + Stamp duty concessions: First home buyer stamp duty exemptions or concessions apply regardless of whether you used FHSS. Use our stamp duty calculator to see what you will pay.
- FHSS + Keystart (WA): WA buyers can combine FHSS savings with a Keystart loan (2% deposit, no LMI). FHSS gives you the deposit and then some — the excess becomes a buffer for settlement costs.
The key insight is that FHSS is a savings accelerator, not a loan or grant. It helps you build your deposit faster through tax savings. Every other first home buyer scheme stacks on top because they address different parts of the purchase process.
Frequently Asked Questions
How much can I withdraw under the FHSS scheme?
You can withdraw up to $50,000 in eligible voluntary contributions, plus deemed earnings calculated by the ATO using the 90-day bank bill rate plus 3%. The maximum you can contribute per financial year is $15,000. With deemed earnings, your total FHSS withdrawal after three to four years of contributions is typically $42,000 to $55,000.
What are the FHSS contribution limits for 2026?
The FHSS contribution limits for 2026 are $15,000 per financial year and $50,000 lifetime maximum. The lifetime cap was increased from $30,000 to $50,000 on 1 July 2022. These contributions count towards the overall $30,000 concessional contributions cap, which also includes your employer's super guarantee payments.
Can couples both use the FHSS scheme?
Yes — each person in a couple can independently access their own $50,000 FHSS entitlement, for a combined total of $100,000. Both partners must meet eligibility individually (never owned property, 18+). There is no requirement to be married or in a de facto relationship. If one partner has previously owned property, the other can still use FHSS.
Do I have to be a first home buyer to use FHSS?
Yes. You must never have owned residential, investment, commercial, or vacant land property in Australia to be eligible for the FHSS scheme. This is assessed at the time you request a release of your FHSS amounts. There is no exception for properties owned briefly or properties you never lived in.
How long does FHSS withdrawal take?
The FHSS withdrawal process typically takes 15 to 25 business days from the time you submit your release request. Your super fund has an additional 10 business days to transfer funds to the ATO. In total, allow 4 to 8 weeks from release request to money in your bank account. During peak periods (January to March), processing can take longer.
Is FHSS worth it?
Yes, if you are in a 30% or higher tax bracket — the FHSS can save you $5,000 or more per year in tax compared to saving the same amount in a bank account. Over three years, that is $10,000 to $15,000 in extra savings. The trade-off is reduced flexibility (must buy within 12 months of withdrawal) and processing delays (4 to 8 weeks to receive funds). For most first home buyers, the tax savings far outweigh these constraints.
Can I use FHSS and the First Home Guarantee together?
Yes — the FHSS and the First Home Guarantee are separate schemes that work together. Use FHSS to build your deposit through tax-advantaged savings, then use the First Home Guarantee to buy with just a 5% deposit and no Lenders Mortgage Insurance. They address different parts of the purchase process and combine well.
What happens if I don't buy a home after withdrawing FHSS?
If you do not sign a contract within 12 months of requesting the release, you have three options: (1) recontribute the amount back into your super fund — the recontribution does not count towards your concessional cap; (2) apply to the ATO for a 12-month extension, which is at the Commissioner's discretion; or (3) keep the funds and pay a flat 20% FHSS tax on the withdrawn amount. Option 1 is usually the best outcome if you are not ready to buy.
Ready to see what you can afford with your FHSS savings? Use our borrowing power calculator to see how your deposit affects your borrowing capacity. And when you are ready to apply for a home loan, get matched with a broker who can help you structure your application around your FHSS withdrawal timeline.
