FHSS Scheme 2026: Save Faster for Your First Home

The First Home Super Saver (FHSS) scheme lets you save for your first home deposit inside superannuation, taking advantage of super's lower tax rate. Instead of saving in a bank account where interest is taxed at your marginal rate, you contribute extra to super where contributions are only taxed at 15%.

When you're ready to buy, you withdraw your voluntary contributions (plus deemed earnings) from super to use as a deposit. For someone on the 30% tax bracket, this tax difference alone can add thousands to your deposit over 3-4 years of saving.

The scheme has been available since 2018 and was expanded in 2022 to allow up to $50,000 in total withdrawals (up from $30,000).

You can contribute up to $15,000 per financial year and $50,000 in total through the FHSS scheme. These limits apply to voluntary contributions only — your employer's SG contributions don't count toward FHSS.

Contributions can be concessional (salary sacrifice or personal deductible contributions, taxed at 15% on entry) or non-concessional (after-tax voluntary contributions, not taxed on entry).

When you withdraw, you get your contributions back plus deemed earnings calculated at the SIC rate (currently about 4.96%). For concessional contributions, the withdrawal is taxed at your marginal rate minus a 30 percentage point offset — so if you're on the 30% bracket, the withdrawal tax is effectively 0%.

Let's compare for someone earning $80,000 (30% marginal rate) saving $10,000/year for 3 years:

Normal savings account (4.5% interest): After 3 years, you have approximately $31,900. Interest earned is taxed at 30%.

FHSS (concessional): You salary sacrifice $10,000/year. Only $8,500 enters super after 15% tax. With deemed earnings at 4.96%, after 3 years you withdraw approximately $28,700 — but you also saved $1,500/year in income tax (the difference between 30% and 15%), giving you $4,500 extra over 3 years. Net position: approximately $33,200.

The tax advantage grows at higher tax brackets. At 37% or 45%, FHSS is significantly more attractive. Use our FHSS Calculator to model your exact scenario.

To use FHSS, you must: never have owned property in Australia (including investment property), be 18 or over, and not have previously used the FHSS scheme to buy a home.

Important process steps: (1) Apply to the ATO for a FHSS determination before signing a contract. (2) Once you receive the determination, you have 12 months to sign a contract to buy or build. (3) You must occupy the property as your home within 12 months of settlement and live there for at least 6 of the first 12 months.

If you apply for a FHSS release but don't end up buying, you must either re-contribute the amount to super or pay FHSS tax on it. Don't apply until you're genuinely ready to purchase.

Exceeding the $15K annual cap: Contributions above the cap don't qualify for FHSS withdrawal and get stuck in super until preservation age. Track your contributions carefully.

Applying too early: The 12-month clock starts when you receive your determination. If you're not ready to buy within 12 months, wait before applying.

Forgetting it's inside super: FHSS contributions are subject to super contribution caps ($30,000 concessional cap in 2025-26). If your employer contributes $12,000 SG and you salary sacrifice $15,000 for FHSS, your total concessional contributions are $27,000 — still under the cap, but watch it.

Not considering the opportunity cost: Money in super earns actual returns (which could be higher or lower than the deemed rate). The deemed rate is guaranteed for the FHSS calculation, but your super fund's actual returns affect your overall super balance.