How does the First Home Super Saver Scheme (FHSS) work in Australia?

The First Home Super Saver Scheme (FHSS) allows first home buyers to save money for their first home inside their superannuation fund, taking advantage of the concessional tax rates that apply within super. It is administered by the ATO.

How it works: You make voluntary concessional or non-concessional contributions to your super fund. The concessional contributions are taxed at 15% inside super (instead of your marginal rate), giving you more money to save. When you are ready to buy your first home, you apply to the ATO to release the funds. The ATO calculates how much can be released and issues a release authority to your super fund.

How much can be released: You can release up to A$15,000 of voluntary contributions per financial year, with a total lifetime limit of A$50,000. Only voluntary contributions count — not employer SG contributions. The release amount also includes an associated earnings amount calculated by the ATO at a set rate (the shortfall interest charge rate).

Tax on release: The released amount is included in your assessable income in the year it is released, but you receive a 30% tax offset to reduce the tax payable. Effectively, the tax on the withdrawal is significantly lower than your marginal rate on the equivalent savings made outside super.

Eligibility: You must never have owned property in Australia (including vacant land or commercial property), you must intend to live in the property, and you must be 18 or over at time of application. The property must be your first home. After release, you have 12 months to sign a contract to purchase a qualifying home (extendable to 24 months in some cases).