How Does the First Home Super Saver (FHSS) Scheme Work?
The FHSS scheme lets first home buyers save inside super — contribution caps, the release formula, and the steps to withdraw it for a deposit.
How does the First Home Super Saver (FHSS) scheme work?
The First Home Super Saver (FHSS) scheme lets you make voluntary contributions into your superannuation fund and later apply to the ATO to have them released — along with associated earnings — to help pay for a deposit on your first home. Your money still sits inside your normal super fund; you aren’t opening a separate account. What changes is that a defined slice of your super becomes eligible for early release, within caps the ATO sets and under a formula that decides exactly how much comes back out.
Two kinds of contributions count toward FHSS. Concessional contributions are made from pre-tax income — employer super guarantee payments and salary-sacrificed amounts — and are taxed inside the fund at super’s contributions tax rate rather than your marginal income tax rate. Non-concessional contributions are made from money you’ve already paid income tax on, most commonly a personal contribution from your take-home pay. The scheme treats the two differently when it works out what you get back, covered below.
| FHSS parameter | Value |
|---|---|
| Maximum eligible contributions per financial year | $15,000 |
| Maximum eligible contributions in total | $50,000 (measured from 1 July 2017) |
| Release — non-concessional component | 100% of eligible non-concessional contributions |
| Release — concessional component | 85% of eligible concessional contributions |
| Order contributions are released in | First-in, first-out (FIFO) across contribution years |
How much can you contribute under FHSS?
The scheme counts a maximum of $15,000 of eligible contributions from any one financial year, and $50,000 in total across all years, measured from 1 July 2017. Contributions above either cap don’t count toward your FHSS amount — they stay in your fund under the normal superannuation rules, just outside what you can later ask to have released under this scheme.
There’s no minimum period a contribution has to sit in your fund before it qualifies — an eligible contribution counts as soon as it’s made, provided it’s paid on or after 1 July 2017. What counts as “eligible” is about contribution type, not timing: voluntary concessional contributions (salary sacrifice, or personal contributions you claim a tax deduction for) and voluntary non-concessional contributions (personal after-tax amounts you don’t claim a deduction for) both qualify. Employer super guarantee payments, contributions mandated by an award or industrial agreement, spousal contributions, government co-contributions, and contributions that already exceed the standard super contribution caps don’t count toward your FHSS amount — they still sit in your fund, just under the normal superannuation rules rather than this scheme.
Superannuation rules are complex and the consequences of getting a contribution or release wrong can be significant — seek advice from a licensed financial adviser or registered tax agent before acting.
How is the FHSS release amount calculated?
The amount released follows a set formula:
FHSS release amount = 100% of eligible non-concessional contributions + 85% of eligible concessional contributions + associated earnings
The 85% figure on concessional contributions reflects that those contributions have already had contributions tax deducted inside the fund; the 100% figure on non-concessional contributions reflects that they went in from money already taxed as income. On top of both, the released amount includes associated earnings — the ATO’s calculation of what those contributions have earned while held under the scheme, worked out as part of your determination (see the process below).
Where you’ve made eligible contributions across more than one financial year, FHSS applies them on a first-in, first-out (FIFO) basis — your earliest eligible contributions are drawn on first when the ATO works out what’s released and what associated earnings has accrued on them.
What’s the step-by-step process to use FHSS?
Using the scheme runs through four broad stages, though the detail of each is set by ATO process rather than by the contribution caps or release formula above:
- Make eligible super contributions. You, or your employer, make concessional or non-concessional contributions to your super fund, within the $15,000-per-year and $50,000-total FHSS caps (see the eligibility conditions flagged above).
- Apply for an FHSS determination. You request a determination through ATO online services (linked to myGov) any time before ownership of the property transfers to you — generally before settlement. The determination tells you your FHSS maximum release amount, using the release formula above, including the associated-earnings component: a notional earnings figure the ATO calculates at the shortfall interest charge rate. You can request more than one determination over time, and you can amend an existing one or request a new one to add contributions made since your last determination, as long as you haven’t yet requested a release.
- Request the release. Once you hold a determination, you request a release through the same ATO online services, nominating the amount (up to your maximum releasable amount), which super fund(s) to draw from, and the bank account for payment. You can only submit one release request, so it needs to cover everything you want released. The ATO then issues a release authority to your fund, withholds tax, and pays you — typically within 15 to 20 business days of your request, as at July 2026.
- Sign a contract for your first home within the required timeframe. For determinations made on or after 15 September 2024, you need to sign a contract to purchase or construct your first home (or recontribute the released amount to super) within a window that starts 90 days before your release request and ends 12 months after it. The ATO can extend that by a further 12 months — up to 24 months in total, as at July 2026 — and you don’t need to apply; it grants the extension automatically unless it has reason not to.
Is the amount you withdraw taxed?
The non-concessional and concessional components are taxed differently. Your non-concessional contributions come back tax-free, since you already paid income tax on that money before it went into super. The concessional component and the associated earnings on both components make up your “assessable FHSS released amount” — this is included in your tax return for the year you request the release and taxed at your marginal rate, but you receive a non-refundable tax offset equal to 30% of that assessable amount. The ATO also withholds tax before paying you, generally based on your expected marginal rate less the 30% offset, or 17% if it can’t estimate your rate, as at July 2026 — that withholding is then reconciled against your actual tax liability when you lodge. Tax outcomes depend on your circumstances — speak with a registered tax agent before acting.
What happens if you don’t end up buying a home?
If you reach the end of the allowed period — up to 24 months after your release request — without signing a contract, you have two options. You can recontribute an amount at least equal to your assessable FHSS released amount, less any tax withheld, back into your super fund as a non-concessional contribution — you can’t claim a tax deduction for it, and doing so means you can’t use the FHSS scheme again, even though the money has returned to super. Or you can choose to keep the released amount, in which case it’s subject to FHSS tax — a flat 20% of your assessable FHSS released amount, as at July 2026, on top of any income tax already payable on it.
Where does FHSS fit alongside other ways to save a deposit?
FHSS works alongside, not instead of, other ways to fund a first home deposit — see our guide to how much deposit you actually need for the wider picture of deposit paths, government schemes and the costs that sit on top of a deposit. Whether the caps, the release mechanics and the administrative steps above are worth it for your situation is a separate question from how the scheme works, and it depends on your income, how much you can afford to contribute, and your timeline to buy.
A registered tax agent or licensed financial adviser can model FHSS against your own numbers before you commit contributions that are harder to unwind than a bank deposit.
