Your super fund is a tax-advantaged savings account you can raid for a deposit
The First Home Super Saver Scheme lets you divert up to $15,000 a year of your income into superannuation, where it is taxed at 15% instead of your marginal rate, then withdraw up to $50,000 plus to use as a home deposit. The tax saving is real but modest, and the withdrawal process has strict timing rules that catch people out. Understanding the mechanics helps you decide whether locking your deposit money inside super is worth the benefit.
- 15,200 people withdrew $303.6 million in 2024-25 alone .
- The 2024-25 average rose to nearly $20,000 per withdrawal .
- Most users are withdrawing well under the $50,000 maximum, meaning they are either not maximising the benefit or buying before they reach the cap .
The scheme is gaining traction, but the average withdrawal tells you most people are leaving money on the table.
How the tax advantage actually works
You make to your super fund above what your employer pays. These can be salary sacrifice (pre-tax) or personal contributions you later claim as a tax deduction. Either way, the contribution is taxed at 15% inside super — not at your marginal tax rate, which for most first home buyers sits between 30% and 37% .
When you are ready to buy, you apply to the ATO to release those contributions plus deemed earnings. The released amount goes towards your deposit. The scheme does not give you access to your employer contributions or your existing super balance. It only covers voluntary contributions made after 1 July 2017, up to the scheme limits .
The benefit comes from the gap between your marginal tax rate and the 15% super tax rate. On a taxable income of $100,000, contributing $15,000 per year as salary sacrifice means paying $2,250 in contributions tax instead of $4,800 in income tax — $2,550 saved per year, before the withdrawal tax is applied .
On withdrawal, the ATO releases 85% of concessional contributions plus deemed earnings, and the released amount is taxed at your marginal rate minus a 30% offset . For someone in the 30% + 2% Medicare levy bracket, the withdrawal tax rate works out to 2% . Over 3 years contributing $15,000 annually, the tax saving lands at roughly $6,900, rising to $7,650 to $8,800 over the full 4 years to reach the $50,000 cap .
The contribution limits that constrain what you can put in
Rule | Limit |
|---|---|
Maximum voluntary contributions per financial year (FHSSS) | $15,000 |
Maximum total contributions across all years (FHSSS) | $50,000 |
Annual concessional contributions cap (all super, including employer) | $30,000 (2025-26) |
Annual non-concessional contributions cap | $120,000 (2025-26) |
The $15,000 annual FHSSS limit sits within your overall concessional cap. If your employer contributes $8,000 in super guarantee and you salary sacrifice $15,000 for the FHSSS, your total are $23,000 — still under the $30,000 cap .
You can contribute as concessional (salary sacrifice or personal deductible) or non-concessional (personal after-tax, no deduction claimed). Most people use concessional contributions because the 15% super tax rate is the source of the tax saving .
The withdrawal process is where people come unstuck
This is where the scheme gets complicated. The process runs through your myGov account and the ATO, not your super fund .
- 1Request an FHSSS determination. Log into myGov and ask the ATO to calculate your maximum releasable amount. You can request multiple determinations over time as your contributions grow .
- 2Request a release. Submit a release request through myGov. The ATO contacts your super fund and arranges payment. Processing takes 15 to 25 business days .
- 3Sign a contract. You have 12 months from the date of your release request to sign a contract to buy or build a home. You can apply to the ATO for one 12-month extension .
- 4Notify the ATO. After signing a contract, you must notify the ATO. For determinations made on or after 15 September 2024, you have 90 days to notify .
- 5Lodge your tax return. The released amount is included in your assessable income for the year, with the 30% FHSSS tax offset applied .
The 12-month buying window. If you miss the deadline (and the extension), you face two options: recontribute the money to super as a non-concessional contribution, or keep it and pay a 20% FHSSS tax on the assessable amount .
The September 2024 change. You can now request a determination after exchanging contracts, as long as settlement has not occurred . This gives more flexibility if you find a property before completing the FHSSS process.
Processing delays. The ATO takes 15 to 25 business days to process a release. If you need the money for a deposit at exchange, you must plan well ahead .
When the scheme earns its complexity — and when it does not
The scheme works best when you are 2 to 4 years away from buying, you earn enough that the tax rate gap is meaningful (taxable income above $45,001), and you can commit to regular salary sacrifice contributions . On a $100,000 taxable income, contributing $15,000 per year for 3 years saves you roughly $6,900 compared to a savings account . That is real money.
It does not make sense if you plan to buy within 12 months (one year of contributions saves you only around $2,300), if your income is below $45,001 (the tax gap narrows to 1%, saving you just $150 on $15,000 ), or if you are uncertain about buying at all (your money stays locked in super until retirement unless you pay the 20% penalty tax ).