First Home Super Saver Scheme (FHSS) 2026: Limits, Tax and How to Withdraw

FHSS stops the tax office taking as big a slice of the deposit you were saving anyway, but it won’t negotiate the price. Plan around the release timing, then build a buying plan so the deposit goes as far as it can.

How the FHSS scheme works

The First Home Super Saver scheme lets you save part of your first home deposit inside your super fund and withdraw it later. You make extra voluntary contributions, the money sits in super, and when you’re ready to buy you ask the ATO to release those contributions plus an amount of deemed earnings.

The reason to bother is tax. Before-tax contributions are taxed at 15% in your fund, not at your marginal rate, and the earnings are set at a rate most savings accounts don’t match. In 2025–26 there were 18,400 requests for a release, for $386.7 million between them, about $21,000 each.

How much you can put in and take out

• Annual limit: $15,000 of voluntary contributions counts in each financial year. Anything above it stays in super.
• Total limit: $50,000 across all years since 1 July 2017. It was $30,000 until it rose for determinations requested from 1 July 2022.
• The 85% rule: you can release 85% of counted before-tax contributions, because your fund has paid 15% tax on them, and 100% of after-tax ones. Salary sacrifice $25,000 in a year and $15,000 counts, of which $12,750 is releasable.
• Order: contributions count first in, first out, by the date your fund received them. When before-tax and after-tax contributions arrive together, the after-tax ones count first.

What doesn’t count: your employer’s super guarantee, contributions required by an award, contributions from your spouse, parents or anyone else, government co-contributions, downsizer contributions, and anything over the normal contribution caps.

Deemed earnings

You don’t get your fund’s actual returns. The ATO calculates earnings on each counted contribution at the shortfall interest charge (SIC) rate, compounding daily from the first day of the month the fund received it until the day of your determination. The SIC rate is the 90-day bank bill rate plus 3 percentage points and is reset every quarter: 7.51% a year for October–December 2026.

That cuts both ways. In a year when your balanced fund returns 10%, the FHSS amount still grows at the SIC rate; in a year when markets fall, it still grows. Your release can be more or less than the growth in your account.

How FHSS is taxed

• Going in: before-tax contributions are taxed at 15% in your fund instead of at your marginal rate. After-tax contributions aren’t taxed again.
• Coming out: the released before-tax contributions and all the earnings, called the assessable FHSS released amount, are added to your taxable income in the year you request the release. You pay your marginal rate plus the 2% Medicare levy, less a non-refundable 30% offset.
• Withholding: the ATO withholds your estimated marginal rate including Medicare, less 30%, before paying you, or 17% if it can’t estimate it. You get an FHSS payment summary after 30 June and settle up in your tax return.

The released amount can push you into a higher bracket for the year, so the rate that applies is the one on your income plus the release.

Other things to know:

• Study loans (HECS-HELP): salary sacrifice counts in your repayment income in the year you make it. The released amount doesn’t count for study loan repayments, family assistance, the Medicare levy surcharge or child support.
• Division 293: if your income plus concessional contributions passes $250,000, those contributions are taxed an extra 15%. The released amount is taken out of your Division 293 income.
• Your pay: the tax on release is due in your return, so check your employer is withholding enough during the year.

FHSS or a savings account? A worked example

A first home buyer on $90,000 salary sacrifices $10,000 a year for 3 years, against taking the same pay and saving it in an account paying 4.5% (interest taxed at their rate). The deemed earnings rate is held at 7.51%.

FHSS leaves $6,706 more. With after-tax contributions of the same amount the gain falls to $2,204, all of it from the deemed earnings rate being higher than the account’s after-tax return. Try your own salary in the FHSS calculator.

Is FHSS worth it?

It tends to work well when:

• your marginal rate is 30% or more (taxable income over $45,000)
• you can salary sacrifice, or make personal contributions and claim the deduction
• you expect to buy within a few years, and you’re saving anyway

It does less, or can backfire, when:

• Your rate is 15%. The tax saving going in is the 2% Medicare levy, so most of the gain is the earnings rate. On $40,000 the same plan is $1,711 ahead of a bank.
• You might not buy. You’d have to put the money back into super or pay 20% FHSS tax.
• You might need the money. It’s locked in super until you request a release.
• You’re close to the concessional cap with your employer’s super guarantee.
• You’re buying within weeks. The release takes 15 to 20 business days, and you get one release only.

The deemed rate can also fall. It follows the bank bill rate, which follows the cash rate, so a run of rate cuts shrinks the earnings. Everyone’s tax position differs, so get personal financial or tax advice before committing a large amount.

How to contribute

• Salary sacrifice: ask your employer to pay part of your pre-tax salary into your super. It’s the simplest route and the tax saving comes through your pay.
• Personal contribution with a deduction: pay into your fund from your bank account, then lodge a notice of intent to claim a deduction with your fund and wait for its acknowledgement. You claim the deduction in your tax return. It counts as before-tax, the same as salary sacrifice.
• Personal after-tax contribution: pay in and don’t claim a deduction. It comes back in full, but saves no tax.

You don’t tag contributions as FHSS. Your fund reports them to the ATO, and when you request a determination the form is pre-filled with your contributions since 1 July 2017. You check it, add any that are missing (2017–18 salary sacrifice isn’t pre-filled), and list any deductions you’ve claimed or intend to claim. The ATO matches it against your fund’s records.

Who can use it

• You must be 18 or over to request a determination, though contributions you made before 18 can count.
• You must never have owned property in Australia, including an investment property, vacant land, commercial property, a lease of land or company title. If you lost all your property through financial hardship, such as bankruptcy, a relationship breakdown or serious illness, you can apply for a hardship determination.
• You can’t have had an FHSS release before. A request you withdrew doesn’t count.
• You don’t need to be an Australian citizen or permanent resident.
• You must move in as soon as practicable and live there for at least 6 of the first 12 months.

What you can buy with it

• An established home, a new home, or a home off the plan.
• Building a home: land with a contract to build on it.
• Not vacant land on its own, a houseboat, a motor home or an investment property.

FHSS has no price cap, unlike the 5% Deposit Scheme and Help to Buy. It works on established homes, unlike most first home owner grants.

Getting your money out, step by step

1. Request an FHSS determination in myGov (ATO online services, then Super, Manage, First home saver). It tells you your maximum release amount. You can request more than one, and you must have one before the home becomes yours.
2. Request the release. You get one. You can change or cancel it until the ATO starts processing it. You can request it before you sign or up to 90 days after.
3. Receive the money. The ATO withholds tax and pays you in 15 to 20 business days. It goes to you, not the seller or your conveyancer.
4. Sign a contract within 12 months of the release request. The ATO can extend this by up to 12 months, generally without you applying.
5. Tell the ATO within 90 days of signing.
6. Include it in your tax return for the year of the release, with the FHSS payment summary.

The timing rules since September 2024

The rules changed on 15 September 2024, and plenty of advice online, including some on forums, still describes the old ones. For determinations made on or after that date:

You can now also amend or revoke a determination, and withdraw or amend a release request until the ATO starts processing it. If you tried to use FHSS between 1 July 2018 and 14 September 2024, were refused, and now own a home, you can apply again until 14 September 2027. See the ATO’s page on previous requests.

If you don’t buy

If you’ve had the money released and don’t sign a contract in time, you have two options:

• Put it back into super: recontribute the assessable amount, less the tax withheld, as a non-concessional contribution and tell the ATO. It then stays in super until retirement, and you can’t use FHSS again.
• Keep it: pay 20% FHSS tax on the assessable amount, on top of the income tax.

If you haven’t requested a release, nothing happens: the contributions stay in your super as normal.

Couples, siblings and friends

FHSS is per person, not per home. Two eligible buyers can each release up to $50,000 of contributions plus earnings towards the same purchase, which is $100,000 of contributions between a couple. Siblings and friends buying together can do the same. Each of you applies through your own myGov account and must be on the title. If your partner has owned property before, that doesn’t stop you using FHSS, as long as you never have.

Using FHSS with other schemes

The Australian Government says FHSS can be combined with its other home buyer schemes and with state schemes. That includes:

• the 5% Deposit Scheme, to buy with a 5% deposit and no LMI
• Help to Buy, where the government puts in up to 40% of the price
• your state’s first home owner grant and stamp duty concessions

State grants and concessions have their own rules, so check with your state’s revenue office. Our national first home buyer guide shows how the pieces fit, and can I use my super to buy a house? covers what else super can and can’t do.