Saving Super for a Deposit

First Home Super Saver Scheme


This Fact Sheet will provide you with important information relating to the First Home Super Saver Scheme.



The First Home Super Saver (FHSS) Scheme was introduced by the Australian Government in the Federal Budget 2017-2018 to reduce the pressure on housing affordability.  The FHSS Scheme allows you to save money for your first home inside your superannuation fund.  This will help first home buyers save faster with the concessional tax treatment of super.

What is the First Home Super Saver Scheme?

 From the 1st July 2018 individuals will be able to apply to withdraw voluntary pre-tax and post-tax contributions made to super after the 1st July 2017 for a first home deposit.

From the 1st July 2017 individuals can make voluntary contributions of up to $15,000 per year and $30,000 in total, to their superannuation account to purchase a first home.  This is in addition to your normal 9.5% Employer contribution.  The voluntary contributions still have to remain within your existing superannuation caps.  These contributions, along with the deemed earnings can be withdrawn for a deposit from 1 July 2018.

It is important to note that any withdrawals containing a taxed element, i.e. concessional contributions, will be taxed at your marginal tax rate less a 30% offset.

Many employees will be able to take advantage of salary sacrifice arrangements to make pre-tax contributions.  Individuals who are self-employed or whose employers do not offer salary sacrifice arrangements can make a tax deduction on personal contributions, which means that savings are effectively coming out of pre-tax income.


The Facts 

  1. Financial Limits on how much you can save
    1. Concessional (before tax) contributions cap: $25,000p.a.
    2. Non-concessional (after-tax) contributions cap: $100,000p.a.
  2. Maximum Release Amount
    1. 100% of eligible non-concessional contributions
    2. 85% of eligible concessional contributions
    3. Associated earnings are calculated on these contributions using a deemed rate of return – this is based on the 90 day bank bill rate plus three percentage points (shortfall interest charge rate).
    4. Tax is payable on contributions made concessionally as well as deemed earnings.  This is your marginal tax rate less a 30% tax offset.
  3. The maximum release amount takes into account the $15,000 limit from any one year and $30,000 total limit to the total contributions across all years when calculating the eligible contributions, before adding the associated earnings.
  4. The ATO must have released an FHSS amount to you before you sign a contract to purchase or construct residential premises or you may be liable to pay FHSS tax.  This is a flat rate of 20% of the assessable amount that was released from your super fund.
  5. Your super fund is not in charge, the ATO will decide what counts towards the FHSS.  The ATO will advise your super fund on the amount that can be released when you submit an application to withdraw your deposit savings.
  6. The ATO does not require proof of a home purchase before allowing release.  However, once the ATO does release your contributions, you must purchase your home within 12 months, or sign a contract within 12 months to build a house.  If this does not happen, you can apply for an extension of up to 12 months, or recontribute the amount to your super fund, or use the money for other purposes and pay additional tax.


How your contributions are ordered

 A first-in first-out rule applies – this means that contributions that you make in an earlier financial year are counted before contributions in a later financial year.  Contributions you make within a financial year are counted in the order your make them.

  1. A simultaneous contribution rule applies – this means if you make an eligible concessional contribution and an eligible non-concessional contribution at the same time, your non-concessional contributions are taken to be made first.
  2. If you make your contributions within a financial year and you claim a deduction for some or all of the contributions, the resulting eligible non-concessional contributions (if any) are taken to be made before any eligible concessional contributions.


Requesting a determination

You can request a determination on more than one occasion from the ATO

  1. You can then decide to apply for a release of your amounts if you are ready to purchase your home, be aware of the following:
    1. You can only apply for a release once
    2. Must confirm as part of your release application that you will not claim a further tax deductions on the non-concessional contributions included in the determination
  2. It will take approximately 25 business days for your fund to release your money and for the ATO to then pay the money to you.
  3. Prior to the ATO releasing the funds to you they will:
    1. Withhold the appropriate amount of tax
    2. Offset the remaining amount against any outstanding Commonwealth debts.