The most common thing people believe about this scheme is the one thing it does not do. You cannot withdraw your super to buy a house. You can withdraw extra contributions you chose to put in, up to set limits, and only if you get the order of steps right.
Plenty of people who grew up around Dubbo and Orange have moved away for work and are now saving a deposit on city prices. The first home super saver scheme, which the ATO calls the FHSS scheme, is one of the few tools that helps, and one of the most widely misunderstood. It lets you withdraw voluntary contributions you have made into super, plus an earnings amount the ATO works out, and put that towards your first home. This is general information only, not personal financial advice or tax advice, because whether the scheme helps depends on your income and how far away your purchase is.
Ironbark Wealth Advisers is a family-led firm based in Dubbo with over 35 years of experience, working with clients across Dubbo, Orange and Australia-wide by video. If you are still getting your head around the basics, start with our guide to how superannuation works in Australia.
Quick summary
- The first home super saver scheme releases voluntary contributions you chose to make, not your super balance and not your employer’s contributions.
- Two caps apply at once: $15,000 from any one financial year, and $50,000 in total.
- The earnings you withdraw are a figure the ATO calculates, not the return your fund actually made.
- Eligibility is assessed per person, so two eligible buyers can each use their own cap on the same home.
- If you do not buy or recontribute, FHSS tax applies at 20% of the assessable amount released.
What the First Home Super Saver Scheme Actually Releases
The first home super saver scheme releases voluntary contributions you chose to make into super, plus a notional earnings amount, and nothing else. Your existing balance stays where it is. So do your employer’s super guarantee contributions, which cannot be released under the scheme at any time, at any age.
Why People Think They Can Withdraw Their Super
The phrase using super to buy a house gets used loosely, and it makes the scheme sound like early access to your balance. It is not. Super is being used as a container here, not as a source of savings. You put extra money in, it sits under super’s tax rules while it is there, and later you take that same money back out for one specific purpose.
The Two Limits on What Can Be Released
Two caps apply at once, according to the Australian Taxation Office: $15,000 of total contributions made in any single financial year, and $50,000 of total contributions made from 1 July 2017. Contributing $20,000 in one year does not add $20,000 to what you can release, because only $15,000 of that year counts.
Why 100% of After-Tax and Only 85% of Before-Tax Contributions Count
Only 85% of before-tax contributions can be released because your fund has already paid 15% contributions tax on that money, so it is not sitting there to release, while after-tax contributions were never taxed inside the fund and count at the full 100%. Contributions come out oldest first, and where you made both types at the same time the after-tax amounts are released first, because they count for more.
The Earnings Amount Comes From the ATO, Not From Your Fund
Associated earnings are a notional amount calculated at the shortfall interest charge rate, not the return your fund actually achieved. A strong year in your investment option does not increase what you can take out, and a poor year does not reduce it.
Who Can Use the First Home Super Saver Scheme
You can use the scheme if you are 18 or older when you request a determination, have never owned property in Australia, intend to live in the home, and have not already completed a release request. The ATO’s eligibility conditions are worth reading in full before you start contributing, because a few of them catch people out.
Never Having Owned Property Is Broader Than It Sounds
Having never owned property in Australia rules out an investment property, vacant land, commercial property, a lease of land and a company title interest, not just a house you lived in. Your name being on the title is what counts, so an inherited share of a property can disqualify you even though you never chose to buy it. The ATO can make an exception where it determines you have suffered FHSS financial hardship.
Eligibility Is Assessed Per Person, So a Couple Gets Two Caps
Eligibility is assessed individually, which means two eligible people buying the same home can each release their own amount. It also means one person’s past property ownership does not disqualify the other. For a couple who both start contributing early, that effectively doubles what the scheme can do.
The FHSS Scheme Can Only Be Used Once
You cannot use the scheme again once you have a completed release request against a determination. There is no partial use and no second go if your circumstances change. That is an argument for getting the timing and the amount right rather than releasing early.
How a First Home Super Saver Release Works
A release happens in two steps: you apply to the ATO for an FHSS determination telling you your maximum releasable amount, then you make a separate release request, and the money is paid to you after tax is withheld. Your super fund does not run this process. The ATO does.
The Determination Comes Before the Release Request
A determination is the ATO’s calculation of the maximum you could release, and it always comes first, so you can ask for one at any time, including years before you are ready to buy. The release request is the separate, later step that actually moves the money, and it is the one with timing attached to it. Asking for a determination does not commit you to anything.
You Have 90 Days After Signing a Contract to Request a Release
The period to request a release after entering into a contract is 90 days, extended from the 14 days that applied when the scheme began. The change was announced by the Assistant Treasurer in September 2023 as part of a package fixing what the government described as the scheme’s inflexible timeframes. It matters because a great deal of published guidance still tells first home buyers the money has to be out before they sign anything. Timing is the part people get wrong most often, so check the current sequence on the ATO’s first home super saver pages before you commit to a settlement date.
A Second Chance for People Whose Earlier Request Failed
People whose earlier FHSS request was unsuccessful, and who have since bought property, may still be able to access an amount based on their original determination. The ATO has opened a three year window running from 15 September 2024 to 14 September 2027 for this, and wrote to the people it believed were affected. If you tried to use the scheme years ago and it did not work out, it is worth checking rather than assuming the door is shut.
Tax Is Withheld Before the Money Reaches You
The ATO withholds tax from the assessable part of an FHSS release before paying it to you, so the amount that lands in your account is less than the amount on your determination. In the ATO’s own worked example, a $26,100 release has $1,809 withheld and $24,291 paid out. Budget on the net figure rather than the headline one, and confirm your own numbers on your determination rather than assuming a rate.
What Happens If You Do Not Buy a Home
If you do not sign a contract in time, you have two options: recontribute the assessable amount back into super, or keep the money and pay FHSS tax. The ATO calculates FHSS tax at 20% of your assessable FHSS released amount, which is a real cost rather than a formality. You can also apply to the ATO for more time. Both outcomes are avoidable by not releasing until a purchase is close to certain.
Who the First Home Super Saver Scheme Suits, and Who It Does Not
The scheme suits a super first home buyer on a higher marginal rate with a deposit still a few years away, and works poorly for someone on a low marginal rate or buying within months. The benefit is the gap between the 15% your fund pays on before-tax contributions and the marginal rate you would otherwise pay on that money, so the size of that gap decides whether the extra steps are worth taking.
| Tends to stack up when | Harder to justify when |
|---|---|
| Your marginal rate sits well above the 15% your fund pays on before-tax contributions | Your marginal rate is close to 15%, so there is little to gain |
| You are a year or more away from buying | You expect to buy within a few months |
| Both buyers are eligible and can each use a cap | Only one of you is eligible and the other has owned property |
| You have steady cash flow and an emergency buffer already | Money going in is money you may need back sooner |
The First Home Super Saver Scheme Works for Self-Employed People Too
Unlike salary sacrificing into super, which needs an employer, the first home super saver scheme works from personal contributions you make yourself, so sole traders and contractors can use it. That matters in regional New South Wales, where a lot of people in their twenties and thirties are contracting rather than on a payroll.
What to Have in Place Before You Start Contributing
Money contributed for a first home deposit is money you cannot reach for anything else until it is released, so an emergency buffer and appropriate insurance generally come first. Before-tax voluntary contributions made for a first home also count towards your concessional contributions cap, so they interact with any other contributions strategy you have running.
How Ironbark Works Through the First Home Super Saver Scheme
Ironbark follows the same five step advice process for every client, and a first home question runs through all of it.
- Discovery. A conversation about your goals, financial position, lifestyle needs and future aspirations, including when you actually want to be buying.
- Analysis and Research. Detailed analysis, using trusted research partners to review your options, including whether the scheme gains you enough to be worth the steps.
- Strategy and Recommendations. A tailored plan reflecting your goals, risk comfort and long term priorities, covering how much to contribute and over what period.
- Implementation. We handle setup, applications and paperwork, working with your accountant where needed, so you only sign forms.
- Ongoing Support. Your adviser stays with you, reviewing and adjusting as your income and the rules change.
For the first home super saver scheme, most of the weight sits in steps one and three, because the timing of your purchase decides whether the strategy makes sense at all. There is more on how we work with clients at every stage.
Frequently Asked Questions
Can I use my super for my first home deposit?
Not your super balance, no. The First Home Super Saver scheme releases voluntary contributions you chose to make into super, plus an earnings amount the ATO calculates. Your employer’s super guarantee contributions and the balance you already had cannot be released under the scheme. This is the most common misunderstanding about it.
How much can I take out under the First Home Super Saver scheme?
Two limits apply at once: $15,000 of total contributions made in any single financial year, and $50,000 of total contributions made from 1 July 2017. Within those limits you can have 100% of eligible after-tax contributions and 85% of eligible before-tax contributions released, plus an earnings amount the ATO works out.
Can my partner and I both use the First Home Super Saver scheme?
Both partners can use the First Home Super Saver scheme if both are eligible. Eligibility is assessed individually rather than as a household, so two eligible people buying the same home can each release their own amount. One person having owned property before does not disqualify the other.
Is the First Home Super Saver scheme worth it?
It depends on the gap between your marginal tax rate and the 15% your fund pays on before-tax contributions, and on how far away you are from buying. On a higher income with a few years to go, the gap can be meaningful. On a lower income, or if you expect to buy within months, the benefit is small and the extra steps and timing risk may not be worth it.
What happens if I do not buy a home after the money is released?
You either recontribute the assessable amount back into super or keep it and pay FHSS tax, which the ATO calculates at 20% of your assessable released amount. You can also apply to the ATO for more time. The practical answer is not to request a release until a purchase is genuinely close.
Talk to Ironbark About the First Home Super Saver Scheme
The first home super saver scheme is worth using if the numbers and the timing suit you, and worth skipping if they do not. What decides it is how far away your purchase is, what your marginal rate is, and whether both buyers can use a cap. That is worth half an hour before you start contributing rather than afterwards.
There is no pressure and no obligation. You are welcome to call us on (02) 6884 4680, send us an online enquiry, or book a consultation at a time that suits you. Visit our Church Street office in Dubbo, have us come to you across Orange and the Central West, or meet online if you have moved away for work. You can also read about our superannuation advice, how we work with young professionals, or explore the Ironbark Knowledge Hub.
This article was written by the team at Ironbark Wealth Advisers, a family-led financial planning firm with over 35 years of experience, supporting families and business owners across Dubbo, Orange and regional New South Wales. Ironbark Wealth Advisers Pty Ltd is a Corporate Authorised Representative (CAR No. 315227) of Madison Financial Group Pty Ltd, AFSL No. 246679. This article is general information only and does not take into account your objectives, financial situation or needs. Please consider the relevant Financial Services Guide (FSG) and Product Disclosure Statement (PDS) before making any decisions.
References
- Australian Taxation Office, First home super saver scheme, https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme
- Australian Taxation Office, About FHSS release amounts, https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme/about-fhss-release-amounts
- Australian Taxation Office, Eligibility for the FHSS scheme, https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme/eligibility-for-the-fhss-scheme
- Australian Taxation Office, FHSS tax assessment, https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme/fhss-tax-assessment
- The Hon Stephen Jones MP, Assistant Treasurer, Improving the flexibility of the First Home Super Saver Scheme, https://ministers.treasury.gov.au/ministers/stephen-jones-2022/media-releases/improving-flexibility-first-home-super-saver-scheme
- Australian Taxation Office, Previous unsuccessful first home super saver requests, https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme/changes-to-the-first-home-super-saver-scheme
