Save a house deposit in super: FHSS guide (2026)

You can use some of the extra money you put into super for your first home deposit through the First Home Super Saver scheme (FHSS). If you qualify, you can withdraw eligible extra payments plus an earnings amount calculated by the ATO. Your compulsory employer super and the rest of your balance stay in super.

The tax saving can leave you with more for your deposit than saving the same salary in a bank account. But you need to follow the ATO's withdrawal steps, and tax can reduce the amount paid to you. Keep enough money outside super for costs due before it arrives.

FHSS may suit you if you're saving for a first home and can leave some of your savings in super until you buy. The benefit depends on your tax rate. If you pay little income tax, putting money into super may save you less than the example below.

If you need the money for rent, emergencies or a deposit due soon, keeping it in your bank account may matter more. Money paid into super is subject to super withdrawal rules. A change of plans doesn't mean you can take it straight back out.

Already looking at homes? Read the withdrawal steps before relying on FHSS money for a contract deposit. If you're still saving, our deposit-saving guide covers the day-to-day budget, and our deposit calculator helps you work back from a purchase price.

These are limits on the payments that can count towards FHSS, not a promise of how much cash you'll receive. Only eligible extra payments made from 1 July 2017 count. The amount you can withdraw depends on how those payments were taxed, as explained below.

Your usual super contribution limits still apply. Compulsory employer payments count towards the same limit as salary sacrifice and personal payments you claim as tax deductions. Check how much room you have left before adding money.

You can't carry an unused FHSS allowance into a later year. Even if other super rules let you make a larger payment, only $15,000 from that financial year can count towards FHSS. Reaching the $50,000 contribution limit therefore takes at least four financial years.

The main requirements are:

• You must be at least 18 when you ask the ATO to calculate how much you can withdraw. That calculation is called a determination. Eligible payments made before you turn 18 can still count.
• You generally must never have owned property in Australia.
• You must not already have a completed FHSS release request.
• The home must be in Australia, and your name must be on its title. You must genuinely intend to move in as soon as you can and live there for at least six of the first 12 months from when it is practical to move in.

Previous ownership includes an investment property, vacant land, commercial property or an inherited share on title. Certain long-term leasehold interests and company title interests also count. An ordinary residential rental agreement doesn't disqualify you. The ATO can make an exception if it decides you meet the FHSS financial hardship rules.

A houseboat, motor home or property you only intend to rent out won't meet the home requirement.

Couples are assessed separately. If you both qualify, each of you has your own limits and withdrawal process. If your partner has owned property but you haven't, you may still qualify. Other grants and duty concessions can test both buyers differently, so check those separately. See the ATO's FHSS eligibility rules.

In the example below, putting $10,000 of salary through FHSS leaves $8,330 for a deposit, compared with $6,800 in a bank account. That's $1,530 more after the taxes shown. Both options start with the same salary before tax.

The example assumes the whole $10,000 would be taxed at 30% plus the 2% Medicare levy. It uses the same rates when the FHSS money is withdrawn, the standard 15% tax on payments into super and the 30% FHSS tax offset. All amounts stay within those rates and the relevant contribution limits.

This compares tax only. It excludes earnings, fees, extra contribution tax, government debt offsets and changes to benefits or other obligations. It isn't a forecast of your savings or an ATO payment quote.

Your result will depend on your income, when you pay money into super and the tax year you ask to withdraw it. Actual FHSS payments include an earnings amount, which is also taxable. Interest earned in a bank account may be taxable too.

The ATO works out the earnings amount using its shortfall interest charge rate, which changes each quarter. This is called deemed or associated earnings. It is different from what your super investments actually earn. Investment returns and fees still affect the retirement savings left in your fund, so the ATO rate isn't a guaranteed investment return.

The ATO adds an earnings amount to the eligible payments. Tax on withdrawal can then reduce the cash you receive. If all $50,000 of your eligible payments were salary sacrifice or personal payments claimed as deductions, the contribution part available to withdraw would be $42,500 before earnings and withdrawal tax.

For a personal payment, the tax deduction is what matters. Paying from your bank account doesn't automatically make it non-concessional. If you plan to claim a deduction, give your fund the notice of intent and get its acknowledgement before requesting FHSS release. Withdrawing first can prevent a valid notice. Your accountant or adviser can check the deduction rules and contribution limits.

Ask your fund whether it can release FHSS money before you contribute. Keep its payment records as well as your payslips. A payroll deduction near 30 June may reach the fund in the next financial year, and the date the fund receives it is what counts.

If you add more than the annual FHSS limit, the ATO has rules for deciding which payments count. You can't simply choose the ones you want to withdraw.

Salary-sacrificed super still counts as income when HELP repayments are worked out. The FHSS withdrawal itself is excluded from that repayment-income calculation. Some other income tests can also count reportable super contributions, so check the effect on your benefits and obligations before changing your payments.

The money you withdraw from salary sacrifice or tax-deductible personal payments is taxable, along with the ATO's earnings amount. You'll see this called the assessable FHSS released amount on your paperwork. Eligible after-tax payments you haven't claimed a deduction for aren't taxed again when you withdraw them.

Include the taxable amount in your return for the year you request the withdrawal, even if the money arrives in a later tax year. A 30% tax offset reduces the tax on that amount. The ATO holds back tax before paying you, then works out the final tax through your return. See the ATO's release amount rules.

James and Priya were saving for their first home in Melbourne. At the time, James was 32, an IT consultant earning $85,000 a year, and Priya was 29, a nurse earning $75,000. They decided to add voluntary salary-sacrifice contributions to super rather than rely on their compulsory employer contributions.

From July 2021, each contributed $10,000 a year over two years. That was $40,000 combined. For concessional contributions, the releasable contribution component is 85%, or $34,000, plus the ATO's associated earnings. Tax on release affects the amount that reaches the bank account; $40,000 contributed doesn't mean $40,000 available for the deposit.

By June 2023, they applied through their linked myGov accounts to release the FHSS funds. The ATO processed their applications in just over three weeks. They used the released funds as part of their deposit, signed a contract for a Melbourne townhouse within the scheme's 12-month window and settled three months later.

This purchase took place in 2023. Their release time isn't a promise for another buyer, and the scheme's deadlines have since changed. Use the current steps below to line up your determination, release request and contract dates. The amount you save depends on your tax position and contribution dates.

Before making an offer, check when the contract deposit, finance deadline and settlement fall. The contract deposit can be due before the FHSS money arrives. Write down:

• How much cash is already in your bank account.
• How much FHSS money you expect to receive after tax and any government debt offsets.
• The amount and due date of each purchase payment, plus cash for inspections, legal costs, moving and emergencies.

Your broker can use this to check the loan and deposit plan. Your solicitor can check the contract and payment dates.

Request a determination through ATO online services in myGov. This is the ATO's calculation of the maximum amount you can withdraw. Check that it includes the right payments into your super. You still need a separate request to have the money paid out.

Request the determination before ownership of any Australian real property transfers to you, including vacant land. Once you own the land, it's too late to request a new determination. If you're buying land to build, plan the land settlement and qualifying building contract together.

Once you have a valid determination, ask the ATO to release the amount you want. It arranges payment from your super fund, holds back tax and deducts any required amounts for debts to the ATO or another Commonwealth agency. You receive the balance.

The ATO says most payments take 15 to 20 business days. Leave room for delays, especially if you use several funds or need to correct your contribution records.

You generally get one completed FHSS release. Money added after that can't simply be withdrawn later for a second purchase. Check the ATO withdrawal guidance before choosing how much to request.

If the ATO made your determination on or after 15 September 2024, the timing works in two ways:

• If you sign a qualifying home purchase or building contract first, request your FHSS money within 90 days of signing.
• If you request your FHSS money first, you generally have 12 months from that request to sign the qualifying contract.

In either case, you must request your determination before ownership transfers to you. The 12 months starts when you request the money, not when it reaches your bank account.

The ATO may allow another 12 months to sign, making up to 24 months in total. You don't need to apply for that extension; it will tell you if it grants one. Different, earlier deadlines apply to determinations made on or before 14 September 2024.

The purchase or building price must be at least the total amount shown in your FHSS release request. Buying vacant land alone doesn't meet the rule: you need a qualifying contract to buy or build the home within the allowed time.

For a determination made on or after 15 September 2024, notify the ATO within 90 days of signing your qualifying purchase or building contract, unless it allows more time. This is separate from requesting your money. If you have an older determination, check the earlier rules. See the ATO contract and notification rules.

Check the deadline in your ATO account, including any extension. If you haven't signed a qualifying contract, you have two options:

• Put the required amount back into super within the allowed time. The ATO calls this recontributing. The required amount is based on your assessable FHSS released amount, less the tax already held back. Check its calculation before paying, and don't claim a tax deduction for putting it back.
• Keep the money without meeting the purchase or recontribution rules. Additional FHSS tax is 20% of the assessable FHSS released amount. This is on top of the normal tax on withdrawal.

If you put the money back, you must also notify the ATO through myGov before the allowed period ends. Both steps need to be completed within 12 months of your release request, or within the longer period the ATO has allowed. Check the extension notice in your ATO account rather than assuming you have 24 months.

You can potentially use FHSS alongside the Australian Government 5% Deposit Scheme, a state grant or a first home buyer duty concession. Each has its own buyer, property and timing rules. Passing the FHSS test doesn't mean you pass the others.

A released FHSS amount can also form part of the cash you contribute to a guarantor home loan. The lender will check the source of funds and any savings-history requirement, while the guarantor's position needs separate assessment.

Our job is to compare the loan options, check what evidence the lender needs and line up the cash with your purchase dates. An accountant or licensed financial adviser can help decide how much to put into super and whether the tax and retirement trade-offs suit you. Start by telling us your price range, cash savings, expected FHSS release and when you want to buy.

Ask your fund whether it can release FHSS money. Check how much room you have under the super contribution limits and ask your accountant or adviser about the tax result. Then work out how much needs to stay in your bank account for bills, buying costs and emergencies.

Check your ATO determination and the steps for requesting payment. Give your broker your cash savings, expected FHSS amount, income and price range. Have your solicitor check the contract dates before you rely on the money for a payment.