Saving a deposit inside superannuation sounds unusual until you see the tax mechanics behind it. The First Home Super Saver Scheme lets eligible first home buyers make voluntary contributions into super, then withdraw them later toward a home deposit, taking advantage of super’s lower 15% tax rate on the way in.
At MC Mortgage Solutions, we help Brisbane first home buyers understand how FHSS fits alongside other government support, like the Queensland First Home Owner Grant and stamp duty concessions, and how to structure a loan application once your FHSS funds are ready to use. This guide covers how the scheme works, who’s eligible, and what the numbers actually look like, current as at August 2026. Figures are sourced from the Australian Taxation Office and the Queensland Revenue Office and should be confirmed against current ATO guidance before you rely on them.
What Is the First Home Super Saver Scheme?
The First Home Super Saver Scheme, known as FHSS, is an Australian Government initiative administered by the Australian Taxation Office. It allows eligible first home buyers to make voluntary contributions into their super fund, then request those contributions back, along with associated earnings, to help fund a home deposit.
It isn’t a grant, and the money isn’t extra government funding. It’s your own voluntary savings, held temporarily inside super to take advantage of a lower tax environment before being released for your purchase.
Why Save Inside Super at All?
Voluntary concessional contributions, made through salary sacrifice or personal deductible contributions, are taxed at 15% inside your super fund. For most people, that’s well below their marginal income tax rate, so more of each dollar you contribute ends up actually saved rather than taxed away before it reaches your super balance.
How Is This Different From a Regular Savings Account?
A regular savings account offers no upfront tax advantage. Every dollar you put in has already been taxed at your full marginal rate, and any interest you earn is taxed again at that same rate. FHSS shifts both the contribution and the earnings into super’s more concessional tax treatment for as long as the money sits there.
How Much Can You Contribute and Withdraw?
The scheme has clear limits, and understanding them matters before you start contributing.
Contribution Limits
You can contribute up to $15,000 in eligible voluntary contributions in any single financial year, up to a total maximum of $50,000 across all years. This $50,000 cap applies per person, not per household or per purchase. These are FHSS-specific limits, but your contributions still count toward your normal concessional or non-concessional super contribution caps, so it’s worth checking both before you start salary sacrificing.
How Much You Can Actually Release
Your maximum release amount isn’t simply what you contributed. It’s calculated as:
- 100% of eligible non-concessional (after-tax) contributions
- 85% of eligible concessional (salary sacrifice or tax-deductible) contributions, reflecting the 15% contributions tax already paid inside super
- Plus an amount of associated earnings, calculated by the ATO at the Shortfall Interest Charge rate. These are notional, deemed earnings, not the actual investment returns your super fund earned on the money
Who Is Eligible for the FHSS Scheme?
Eligibility is genuinely stricter than some other first home buyer schemes, so it’s worth checking carefully before you rely on it.
The Core Requirements
- You must be 18 years or older when you request an FHSS determination or release
- You must never have previously held a freehold interest in real property, a long-term lease, or a company title interest in Australia, including investment property you never lived in yourself
- You must not have previously made a successful FHSS release request
- You must genuinely intend to occupy the property as your home as soon as practicable, and live there for at least 6 of the first 12 months after settlement or construction completion
What You Can and Can’t Buy With FHSS Funds
The property must be residential premises located in Australia. You can’t use FHSS to purchase a houseboat, a motor home, or any premises not capable of being occupied as a residence. Standalone vacant land also doesn’t qualify, though you can use FHSS to fund the construction of a home on vacant land, provided ownership of the land hasn’t transferred to you before you apply for your determination.
This rule is also worth flagging alongside eligibility: the Queensland First Home Owner Grant generally still allows you to qualify if you’ve owned an investment property you never lived in. FHSS does not; any previous property interest in Australia, lived in or not, generally rules you out, aside from a narrow financial hardship exception the ATO assesses case by case.
The Timeline You Need to Follow
FHSS runs on a strict sequence, and getting the order wrong can cost you the benefit entirely.
Requesting Your Determination
You must request and receive an FHSS determination from the ATO, via myGov, before your property contract completes, generally meaning before settlement. Since September 2024, you no longer need to have your determination in hand before you sign a contract, you can sign first and finalise your determination and release request afterward, provided you do so before settlement. Once you hold a legal interest in real property, including vacant land, you’re no longer eligible to request a determination.
Releasing Your Funds and Signing a Contract
If your determination was made on or after 15 September 2024, you can request your release before signing a contract, or within 90 days after you sign one. From the date of your release request, you generally have 12 months to sign a contract to purchase or construct a residential property. If you haven’t signed within that window, the ATO may allow further time, up to a maximum of 12 additional months, but this isn’t automatic and needs to be requested. If you still haven’t signed a contract by the end of that period, you’ll need to either recontribute the released amount back into super, or keep the funds and pay FHSS tax at a flat rate of 20% on the assessable amount.
How the Tax Benefit Actually Works
The tax treatment happens in two stages, on the way in and on the way out.
Tax on the Way In
Concessional contributions, salary sacrifice or personal deductible contributions, are taxed at 15% inside your super fund, rather than at your marginal income tax rate. For many buyers, that’s a meaningful upfront saving compared to putting the same after-tax dollars into a regular savings account.
Tax on the Way Out
When you release your FHSS amount, the assessable portion, your concessional contributions plus associated earnings, is added to your taxable income for that year, but taxed at your marginal rate, including the Medicare levy, minus a 30% FHSS tax offset. Non-concessional contributions you’ve already paid tax on are released tax-free.
What a Real ATO Example Looks Like
Rather than a hypothetical figure, it’s worth looking at how the ATO itself calculates a release, since the mechanics matter more than any single dollar amount.
In the ATO’s own published example, a person makes monthly salary sacrifice contributions of $1,500, spanning several financial years including a partial final year. Their eligible concessional contributions total $50,000 once the annual and lifetime caps are applied. Their FHSS maximum release amount is calculated as 85% of that $50,000, which is $42,500, plus associated earnings of $5,190, for a total maximum release amount of $47,690.
This is the maximum release amount before tax is withheld. The actual amount paid into your bank account will be lower, since the ATO withholds tax on the assessable portion at the time of release.
A Simple Buyer Example
To put this in perspective for a Brisbane buyer, someone contributing $10,000 a year through salary sacrifice for two financial years would have $20,000 in eligible concessional contributions. Their release amount would be calculated as 85% of that $20,000, which is $17,000, plus whatever associated earnings the ATO calculates over that period at the current Shortfall Interest Charge rate. Their actual bank deposit would be this total minus tax withheld on the assessable portion, at their marginal rate less the 30% offset. This is a simplified illustration only, your own figures will depend on your income, contribution timing, and the SIC rate that applies over your saving period.
Combining FHSS With Other First Home Buyer Support
Brisbane buyers don’t have to choose between FHSS and other government assistance. Several forms of support can generally apply to the same purchase.
The Queensland First Home Owner Grant
Eligible first home buyers can also access the Queensland First Home Owner Grant, a separate $30,000 payment for buying or building a new home valued under $750,000. This is a state grant administered by the Queensland Revenue Office, entirely separate from FHSS, which is a federal scheme run through the ATO.
Stamp Duty Concessions and Deposit Schemes
Queensland first home buyers may also qualify for transfer duty relief. For eligible contracts signed on or after 1 May 2025, new homes and residential vacant land can receive a full exemption with no value cap. For established homes, full exemption generally applies for properties valued around $700,000 or below, with a sliding scale concession up to just under $800,000.
The Australian Government’s 5% Deposit Scheme, administered through Housing Australia, can also apply for eligible Brisbane buyers, letting you purchase with a 5% deposit and no Lender’s Mortgage Insurance. Each of these schemes is assessed on its own eligibility rules, so qualifying for one doesn’t automatically mean you qualify for another.
How MC Mortgage Solutions Can Help
Using FHSS effectively takes planning well before you’re ready to buy, since the contribution side needs time to build and the release process has to happen in the right order relative to your contract. MC Mortgage Solutions helps Brisbane first home buyers understand how their FHSS position fits into their overall deposit and loan application, alongside any other grants or concessions that may apply.
We’re not tax agents or financial advisers, so FHSS contribution strategy and tax outcomes should be discussed with your accountant or a licensed financial adviser. Where we help is on the lending side, structuring your loan application once your FHSS funds are ready, and timing everything so your deposit, pre-approval, and settlement line up properly.
Talk to MC Mortgage Solutions About Your First Home Deposit
If you’re planning to use FHSS as part of your first home deposit, we can help you understand how it fits alongside your borrowing capacity and any other schemes you may be eligible for. Call MC Mortgage Solutions on 1300 633 667 or book a free chat with our Brisbane bayside team.
Frequently Asked Questions
1: How much can I release under the FHSS scheme?
You can contribute up to $15,000 per financial year, up to a lifetime total of $50,000. Your actual release amount includes 100% of non-concessional contributions, 85% of concessional contributions, and associated earnings calculated by the ATO, so the figure you receive is usually different from the total you contributed, and lower again once tax is withheld.
2: Can my partner and I both use FHSS for the same purchase?
Yes, provided you’re both eligible first home buyers. FHSS limits apply per person rather than per household. This isn’t a joint $100,000 scheme limit, it’s two individual $50,000 caps applying to two separate people who both happen to be buying together, so each of you needs to build and release your own contributions.
3: Does owning an investment property disqualify me from FHSS?
Generally, yes. Unlike some other first home buyer schemes, FHSS excludes you if you’ve previously held a freehold interest, long-term lease, or company title interest in any Australian property, including an investment property you never personally lived in, aside from a narrow financial hardship exception.
4: Do I need my FHSS determination before I sign a contract?
Not necessarily. Since September 2024, you can sign a contract first and request your determination and release afterward, as long as you do so before your property settles and within 90 days of signing. Getting your determination sorted earlier still gives you more certainty about your figures before you commit.
5: What happens if I don’t sign a contract within the required timeframe?
You generally have 12 months from your release request to sign a contract. If you need more time, the ATO may allow a further 12 months, but this isn’t automatic, you’ll need to request it. If you still haven’t signed by the end of that period, you’ll need to recontribute the funds to super or pay FHSS tax at a flat 20% on the assessable amount.
6: How is the withdrawn amount taxed?
The assessable portion, your concessional contributions plus associated earnings, is taxed at your marginal rate, including the Medicare levy, minus a 30% FHSS tax offset. Non-concessional contributions are released tax-free, since you’ve already paid tax on that money before it went into super.
7: Can I use FHSS to buy vacant land?
Not on its own. FHSS can’t be used to purchase standalone vacant land, a houseboat, a motor home, or any premises that can’t be occupied as a residence. You can use FHSS to fund construction of a home on vacant land, provided you haven’t already taken ownership of the land before applying for your determination.
8: Can I use FHSS alongside the Queensland First Home Owner Grant?
Yes. FHSS is a federal scheme run through the ATO, while the Queensland First Home Owner Grant is a separate state payment. Eligible buyers can generally access both on the same purchase, along with applicable stamp duty concessions, since each scheme is assessed independently.
9: Should I get tax advice before using FHSS?
Yes. FHSS involves genuine tax and superannuation decisions specific to your circumstances, so speaking with your accountant or a licensed financial adviser before contributing is worthwhile. MC Mortgage Solutions can help with how FHSS fits into your loan application once your funds are ready to use.
