In short: The First Home Super Saver scheme lets you make extra voluntary contributions into super and later withdraw them for a first home deposit. You can count up to $15,000 of contributions from any one financial year and up to $50,000 in total across all years, plus associated earnings. Because contributions are taxed at 15% rather than your marginal rate, most buyers end up thousands ahead.
It is not a grant and it is not free money, but for a salary earner in the 30% tax bracket it turns a slow bank-account deposit into a materially faster one. This guide sets out the limits, the tax arithmetic, the timing traps, and how the released money reaches your conveyancer.
How the scheme works
You make voluntary contributions into your super fund, either by salary sacrifice (concessional, taxed at 15% going in) or from after-tax money (non-concessional). When you are ready to buy, you ask the ATO for a determination, then request a release. The ATO instructs your fund to pay out, withholds tax where it applies, and sends the balance to your bank account.
Only voluntary contributions count. Your employer's compulsory super guarantee does not, and neither do spouse contributions or amounts already in your fund before you started. This is a deliberate design: the scheme is meant to reward extra saving, not to let you raid your existing balance.
The two limits
| Limit | Amount | What it means |
|---|---|---|
| Per financial year | $15,000 | Contributions above this in a single year cannot be counted, even if you never released before |
| Across all years | $50,000 | Total eligible contributions you can ever release under the scheme |
| Plus | Associated earnings | A deemed earnings amount the ATO calculates on top of your contributions |
The $50,000 is a per-person limit, so a couple buying together can each run their own scheme and release up to $100,000 of contributions between them, plus earnings. Both must be eligible in their own right.
How much is actually released
Concessional contributions (salary sacrifice, or personal contributions you claim a deduction for) were already taxed 15% inside the fund, so 85% of them is releasable. Non-concessional contributions were made from money you had already paid tax on, so they release in full and are not taxed again on the way out. Full details are published by the ATO at ato.gov.au.
The assessable part of what you receive (the released concessional contributions and the associated earnings) is added to your taxable income for the year, but you get a non-refundable tax offset equal to 30% of that assessable amount. For anyone on a marginal rate of 30% or more, that offset does most of the heavy lifting.
The tax arithmetic, with real numbers
Take a single buyer in Craigieburn earning $110,000. Her marginal rate is 30% plus the 2% Medicare levy, so 32%. She salary sacrifices $15,000 a year for three years.
Saving inside super
- Contributions: $15,000 × 3 = $45,000
- Contributions tax in the fund at 15%: $6,750
- Releasable: 85% of $45,000 = $38,250 (plus associated earnings)
- Tax on release: assessable $38,250 × 32% = $12,240, less the 30% offset of $11,475 = $765
- Net in her bank account: about $37,485, before earnings
Saving the same $15,000 of salary in a bank account
- $15,000 of gross salary, taxed at 32%, leaves $10,200 a year
- Over three years: $30,600, and any interest earned is taxed at 32% as well
The gap is roughly $6,885 on the same three years of saving, before the associated earnings the ATO adds on top. On a 5% deposit for a $650,000 purchase that is more than a fifth of the deposit, earned purely from the tax treatment.
| Marginal rate (incl. Medicare) | Tax on the assessable release | Effective benefit |
|---|---|---|
| 47% (top bracket) | 17% | Largest |
| 39% | 9% | Large |
| 32% | 2% | Large |
| 17% ($18,201–$45,000 bracket) | Nil, offset exceeds the tax | Small, because there was little tax to save |
If you earn under $45,000 the scheme still works, but the benefit is thin because you were not paying much tax on that income anyway. Model both paths in the deposit savings calculator before you commit.
A couple's combined position
Two buyers each contributing $15,000 a year for a little over three years reach the $50,000 cap each. Released, that is 85% of $100,000 = $85,000 of contributions plus earnings, against roughly $68,000 if the same salary had been banked after tax at 32%. That difference is often what moves a couple from a 5% deposit under the First Home Guarantee to a 10% or 20% deposit and better loan pricing.
The timing rules that catch people out
This is where the scheme goes wrong for buyers who did not read the fine print.
- Get the determination first. You must have an FHSS determination from the ATO before you can request a release. Request it through myGov. It tells you your maximum releasable amount.
- Do not sign a contract too early. For determinations made on or after 15 September 2024, the contract to buy or build must be signed in a window that starts 90 days before your release request and ends 12 months after it. Older determinations have a much tighter 14-day lead-in. The safe practice, and the one we recommend, is to request the determination and the release before you make an offer.
- Releases take time. The ATO and your fund need processing days. Start well before auction season, not the week of the auction.
- You have 12 months after the release request to sign a contract, and the ATO may allow a further 12 months, to a maximum of 24 months. If you do not buy, you must recontribute the assessable released amount to super or it is taxed.
- Notify the ATO within 90 days of signing the contract, for determinations made on or after 15 September 2024.
Confirm the current rules on ato.gov.au before you act, because the scheme has been amended several times.
How it interacts with your loan
The released money is your money, sitting in your bank account, and it counts toward your deposit like any other savings. Two practical points:
- Genuine savings. Some lenders want to see 5% of the price accumulated over three months. Money released from super is generally accepted, but the policy is lender-specific and the paper trail matters. Read genuine savings explained.
- Serviceability is unaffected. Salary sacrificing reduces your take-home pay, and lenders assess your income after that sacrifice unless you stop it. If you are close to your borrowing limit, tell your broker before the contribution starts, or plan to wind it back in the assessment year. Check your position with the borrowing power calculator.
The scheme stacks with the First Home Guarantee, Victoria's First Home Owner Grant and the first home buyer duty exemption. It is not an either-or choice. See how much deposit do I need and the first home buyer guide for Victoria for how the pieces fit together.
Who should not use it
- Anyone buying within a few months. There is not enough time for the contributions and the release to be worth the administration.
- Anyone whose concessional contributions cap is already used by employer contributions. Exceeding the cap creates its own tax problem, so check the current cap.
- Anyone who may need the money for something other than a first home. Once it is in super it is locked to the scheme's rules or to preservation age.
Frequently asked questions
How much can I withdraw under the First Home Super Saver scheme?
Up to $50,000 of eligible voluntary contributions across all years, counting a maximum of $15,000 from any single financial year, plus the associated earnings the ATO calculates. Concessional contributions release at 85% because they were taxed at 15% in the fund; non-concessional contributions release in full. A couple can each run their own $50,000 limit.
Does my employer's compulsory super count?
No. Only voluntary contributions count: salary sacrifice, personal contributions you claim a deduction for, and personal after-tax contributions. Superannuation guarantee amounts your employer must pay, and any balance you had before you started contributing voluntarily, are excluded. This is why the scheme needs to be started deliberately rather than discovered later.
How long does an FHSS release take?
Allow several weeks from requesting a determination to the money landing in your account. The ATO issues the determination, you request a release, the ATO issues a release authority to your fund, the fund pays the ATO, and the ATO pays you after withholding tax. Start before you go to auction, not after you sign.
What happens if I do not buy a home?
You have 12 months from the release request to sign a contract, and the ATO can allow a further 12 months to a maximum of 24. If you still do not buy, you must recontribute the assessable released amount to super within the period allowed, or keep the money and pay FHSS tax on it. Neither outcome is a disaster, but it costs you the benefit.
Can I use the scheme with the First Home Guarantee?
Yes. They do different jobs. The scheme helps you build the deposit; the guarantee lets you buy with 5% of it and no lenders mortgage insurance. Many buyers use both, plus Victoria's stamp duty exemption for first homes under $600,000, which is often the difference between buying this year and next.
Talk to GNT Finance
If you are two or three years from buying, the First Home Super Saver scheme is usually worth setting up in the next pay cycle rather than the next tax year. Gorakh Timilsina will map your deposit timeline, show you what the release adds, and structure the loan around it, at no cost to you for our home-loan service in most cases. We speak English, Nepali and Hindi.
Book a free consultation or call 0426 403 703.
This page is general information only and not legal, tax or financial advice. Laws change — confirm current rules with the State Revenue Office, the ATO or a licensed professional.
Written by Gorakh Timilsina
Founder, CEO & Senior Mortgage Consultant at GNT Finance. Gorakh started as a broker assistant, spent years as a senior credit officer assessing loan applications, and now helps Melbourne families get the right loan approved. English, Nepali and Hindi spoken.