What the First Home Super Saver scheme does
The First Home Super Saver scheme lets you save for a first home inside super, where the money is taxed lightly, then release it toward your deposit. You make extra voluntary contributions, and later apply to the ATO to release those contributions plus an amount of earnings on top. It works alongside your normal super, so your employer’s compulsory contributions stay where they are and don’t count toward what you can release.
How much you can put in and take out
You can count up to $15,000 of voluntary contributions from any single financial year, and $50,000 in total across all years. These caps sit under the wider concessional and non-concessional contributions caps, so your FHSS contributions still use up your normal super caps too. For before-tax contributions, 85% of the amount is eligible to release, because the fund has already taken the 15% contributions tax. After-tax contributions count in full. On release you also receive associated earnings, a figure the ATO calculates rather than your fund’s real return.
The tax on release
When you release money, the before-tax contributions and all the associated earnings are added to your income for that year and taxed at your marginal rate plus the 2% Medicare levy, less a 30% FHSS tax offset. After-tax contributions come out tax-free. Because your marginal rate is often close to that 30% offset, the tax on release tends to be small, which is where the scheme pulls ahead of a standard savings account. The ATO holds back a pay-as-you-go amount when it releases the money, and the rest is squared up in your tax return.
Associated earnings, explained
Rather than track what your contributions earned inside super, the ATO applies a set rate, the shortfall interest charge rate, compounded daily, from the start of the financial year you first contributed. That rate is set each quarter, so the earnings figure this calculator shows is an estimate. Use it as a guide, then get your exact determination from the ATO when you apply to release.
Frequently asked questions
How much can I withdraw under the FHSS scheme?
You can count up to $15,000 of voluntary contributions from any one financial year and $50,000 in total across all years. On release you get back the eligible contributions plus associated earnings the ATO calculates on them. For before-tax (concessional) contributions, 85% of the amount is eligible to release, because the 15% contributions tax has already come out. After-tax (non-concessional) contributions count in full. The caps are per person, so a couple buying together can use them separately.
How does the FHSS scheme save me tax?
Before-tax contributions go into super taxed at 15% rather than your marginal rate, which for a middle earner sits at 30% plus the 2% Medicare levy. When you release the money, the contributions and their associated earnings are taxed at your marginal rate plus Medicare, less a 30% FHSS tax offset. For most earners that release tax is small, so you keep far more than if you had saved the same pay in a normal account after full income tax.
Can my partner and I use the FHSS scheme together?
Yes. The $15,000 yearly and $50,000 lifetime limits apply to each person, not to the property. If you both make eligible voluntary contributions, you can each release up to $50,000 plus associated earnings toward the same first home, so a couple can put up to $100,000 of contributions toward the deposit. You each apply to the ATO separately.
How long does it take to release FHSS money?
Once you request a release, the ATO issues a determination and the money is usually paid within about 15 to 20 business days, though it can take longer. Apply through your myGov account linked to the ATO. Ask for the release before you sign a contract to buy or build, as there are timing rules on when you must enter a contract after the money is released.
What are associated earnings and are they my real returns?
No. Associated earnings are a set amount the ATO adds on top of your contributions, worked out using the shortfall interest charge rate compounded daily, not the actual return your super fund earned. The rate is set each quarter. The associated earnings are included in the amount you can release and, together with any before-tax contributions released, form the part that is taxed on release.
Is the First Home Super Saver scheme worth it?
For most people paying more than 15% marginal tax, before-tax contributions build a deposit faster than a standard savings account, because the money goes in lightly taxed and comes out with a 30% offset. The trade-offs are that the money is locked in super until you release it for a first home, you can only release voluntary contributions you added yourself, and associated earnings are a deemed figure rather than your fund's real return. If your marginal rate is at or below 15%, the before-tax benefit is thin and after-tax contributions may suit you better.
General information, not financial advice.
