How the First Home Super Saver Scheme Can Boost Your Deposit

Yes, the FHSS will save you up to $2250 per year in tax, but it also makes you commit to buying your home, like the Viking’s would burn their ships before hitting enemy land.

If you’re saving for your first home, you’ve probably realised how tough it can be to put money aside while paying rent and covering everyday expenses. The good news is, the government has designed a scheme that can give you a head start: the First Home Super Saver Scheme (FHSSS).

This strategy is all about using your superannuation account as a savings vehicle to build your deposit faster and more tax-effectively.

In this article, we’ll cover:

• What the FHSSS is, and how it works.
• The benefits and potential drawbacks.
• How much you could actually save in tax.
• Who is eligible and the steps to apply.
• How this strategy fits into your overall deposit plan.

What is the First Home Super Saver Scheme?

The FHSSS lets eligible first-home buyers make voluntary contributions into their superannuation fund, which they can later withdraw to put towards their home deposit.

Here’s the key point: super contributions are taxed at 15% instead of your usual marginal tax rate. For most people, this means you keep more of your money.

Example:

If you earn $70,000 a year, your marginal tax rate is 30%. By contributing through super, you only pay 15% tax. That’s a 15% saving—money that stays in your deposit fund instead of going to the tax office.

How Much Can You Save?

Under current rules (2025):

• You can contribute up to $15,000 per year into your super under the FHSSS.
• Important note: This would equate to a $2250 annual tax saving
• The lifetime maximum you can withdraw is $50,000 (up from $30,000 in previous years).

So, if you save consistently over a few years, you could significantly boost your deposit through tax savings alone.

The Benefits of the FHSSS

• Tax savings: This is the big one. More money in your pocket = faster deposit building.
• Discipline: Once money goes into super, you can’t touch it for everyday spending. This “lock-in” helps you stay on track, hence the “Viking” analogy.
• Flexibility: You can use the scheme alongside other strategies, like 5% Deposit Scheme, First Home Owner Grants, First Home Owner Concession and genuine savings.
• Eligibility for couples: If you’re buying with a partner, both of you can use the FHSSS, potentially doubling the benefit.

Things to Watch Out For

Like any strategy, there are a few things to be aware of:

• Caps on contributions: You can’t dump unlimited money into super. Make sure you understand the annual and lifetime limits.
• Withdrawal process: You’ll need to apply to the ATO to release the funds, which can take time. Planning ahead is crucial.
• Rules can change: Government policies aren’t set in stone. Stay up to date so you don’t get caught out.
• Not instant access: If you need your deposit tomorrow, this won’t work. It’s a medium-term strategy.

Who is Eligible?

To qualify for the FHSSS, you need to:

• Be at least 18 years old.
• Have never owned property in Australia before (home or investment).
• Intend to live in the property (it must be a residential home, not purely an investment).
• Occupy the property for at least 6 months within the first 12 months after purchase.

How to Use the FHSSS

1. Check eligibility: Make sure you meet the requirements.
2. Make voluntary contributions: Salary sacrifice or direct contributions into your super.
3. Track contributions: Keep a record so you know how much you’ve put in.
4. Apply to the ATO: Before you sign a contract, request the release of your FHSSS savings.
5. Receive funds: Use the released money towards your deposit.

💡 Tip: Always apply for the release before signing a contract for your property. Otherwise, you could be stuck without access to your funds.

Real-Life Example

Let’s say Emma earns $80,000 a year and decides to use the FHSSS.

• She contributes $10,000 per year into her super for 3 years.
• Normally, she’d pay 30% tax on that income, but under the scheme, she pays just 15%.
• That’s an annual tax saving of $1,500. Over 3 years, that’s $4500 extra added to her deposit.

Combined with her regular savings, Emma ends up with over $35,000 ready for her first home deposit—much faster than if she’d just saved in a normal account.

Here’s what Pink Elephant broker Shane has to share about how it helped him & his partner buy…

“Just like Emma’s story above, that’s exactly what my wife & I did 10 months before buying our first home. It was 2018, and the FHSSS had only just been announced, but I knew it wouldn’t just be a financial benefit because of the tax savings, but forcing a 100% commitment on us to make sure we bought our first home, because of the money we were salary sacrificing into my wife’s superannuation fund. In fact, that’s what I like best about the FHSSS… Once you decide that there’s no other option but to sacrifice, save and buy your first home, this scheme locks you in. I actually liken it to how the ancient Vikings used to burn their ships up in flames just before they hit enemy ground. That’s 100% commitment to victory being the only option. 

Using the FHSSS to save our last $10,000 was absolutely crucial in allowing us to buy our first home when we did. I highly recommend this scheme if you’ve found saving hard in the past.”

FAQs About the FHSSS

Q: Can I use employer contributions for the FHSSS?

A: No, only voluntary contributions count.

Q: What if I change my mind about buying a house?

A: If you don’t buy within the timeframe, your contributions stay in your super until retirement.

Q: Can both partners use it?

A: Yes, if both are eligible. That could mean up to $100,000 combined.

Q: How long does it take to get the money?

A: It can take up to 25 business days for the ATO to release your funds, so plan ahead.

Final Thoughts

The First Home Super Saver Scheme is one of the smartest ways for first-home buyers to accelerate their deposit savings. By taking advantage of lower tax rates and locking in your contributions, you can build your deposit faster and stay disciplined along the way.

👉 Thinking about whether the FHSSS is right for you? Pink Elephant Home Loans can walk you through the process, crunch the numbers for your income, and help you combine this scheme with other deposit-saving strategies to get into your first home sooner.

Call now to get your personalised home purchase plan designed by a Pink Elephant Mortgage Broker!

You’ll know how much you’ll need saved, and what debts to pay down or refinance. 

Get your initial loan assessment done in the next 24 hours.

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