FIRST HOME SUPER SAVER SCHEME
Use your superannuation to fast-track your path to homeownership with Australia's innovative savings initiative
Accelerate Your Home Deposit Savings
With 20+ years of mortgage expertise, our team at LendAU can confidently say the current government homebuyer initiatives are the most powerful we've ever seen. The First Home Super Saver (FHSS) Scheme is revolutionizing how Australians save for their first home.
What is the First Home Super Saver Scheme?
The FHSS Scheme is a government initiative that allows first-time homebuyers to save for a deposit inside their superannuation fund, taking advantage of the concessional tax treatment typically applied to super.
This innovative approach means you can potentially save faster than with a standard savings account, bringing forward your timeline to homeownership.
How the Scheme Works
List of Services
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1. Make Voluntary Super ContributionsList Item 1
You can make voluntary contributions to your super fund specifically for your first home deposit. These can be salary sacrifice arrangements (through your employer) or personal contributions that you claim as a tax deduction.
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2. Benefit From Concessional Tax TreatmentList Item 2
These contributions are taxed at just 15% within your super fund—typically much lower than your marginal income tax rate. This means more of your money goes toward your deposit rather than to tax.
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3. Apply to Release Your SavingsList Item 3
When you're ready to buy, apply to the Australian Taxation Office (ATO) to release your eligible FHSS amounts. The release includes both your contributions and associated earnings calculated by the ATO.
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4. Purchase Your First HomeList Item 4
Use the released funds toward the purchase or construction of your first home. You must sign a contract within 12 months of releasing the funds (though extensions are possible).
Key FHSS Details
Eligibility
To qualify for the FHSS Scheme:
- You must be at least 18 years old
- Never have owned property in Australia
- Never have previously requested an FHSS release
- Plan to live in the property as soon as practicable
- Intend to live in the property for at least 6 months within the first 12 months of ownership
Contribution Limits
The FHSS Scheme allows:
- Up to $15,000 in voluntary contributions per financial year
- Maximum total of $50,000 in contributions across all years
- Both concessional (pre-tax) and non-concessional (after-tax) contributions
- Contributions must be within existing super contribution caps
Tax Benefits.
The tax advantages include:
- Concessional contributions taxed at just 15% (rather than your marginal rate)
- Earnings calculated at a deemed rate rather than being subject to market fluctuations
- When withdrawn, taxed at your marginal rate minus a 30% tax offset
- Potentially thousands saved in tax compared to regular savings methods
The FHSS Scheme works best when started early and consistently contributed to over time. For maximum benefit, consider starting your contributions 2-3 years before you plan to purchase. Our team can help you calculate the optimal contribution strategy based on your income and timeframe.
Important Considerations
01
Impact on Retirement Savings
While the FHSS Scheme offers excellent benefits for home buyers, it's important to consider how withdrawing funds might affect your long-term retirement savings. Our advisors can help you balance your immediate housing goals with your long-term financial security.
02
Combining With Other Incentives
The FHSS Scheme can be used alongside other first home buyer incentives, such as the First Home Owner Grant, stamp duty concessions, and the First Home Guarantee. Our specialists can help you navigate these options to maximize your benefits.
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Timing Your Release
After releasing your FHSS funds, you have 12 months to sign a contract for your first home. Extensions are possible in certain circumstances, but careful planning of your release timing is essential. Our team can help you coordinate this with your home search.
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Non-Compliance Consequences
If you don't purchase a home after releasing FHSS funds, you'll need to either recontribute the amount to super or pay an additional tax. Our team can explain these obligations in detail to ensure you understand all aspects of the scheme.
