First Home Super Saver Scheme (FHSS): how it works

How much you can save

Through the scheme you can save:

• up to $15,000 each financial year;
• up to $50,000 in total across all years;
• plus a calculated amount of earnings on your contributions.

As a calculation, $50,000 ÷ $15,000 is 3.33, so reaching the total at the full annual limit takes at least four financial years. You may start saving before you turn 18.

Contributions count on the date they are deposited into your super fund account, not the date they appear on your payslip. Employer super guarantee contributions and spouse contributions cannot be released under the scheme.

Which contributions you can make

• Salary sacrifice (before tax): arranged with your employer, who must agree.
• Personal voluntary contributions (after tax): made by you or through your employer from after-tax pay.

You can make lump sums, for example one $15,000 contribution each year, or smaller regular amounts. You do not need to tell your employer, fund or the ATO before contributing, unless you intend to apply under the hardship provisions. Check that your fund will release amounts under the scheme and ask about fees, charges or insurance effects.

How much you can withdraw

Your FHSS determination from the ATO shows the maximum you can withdraw, taking the yearly and total limits into account. The fact sheet sets these release percentages:

On top of that come associated earnings calculated by the ATO.

The ATO withholds tax from the amount you receive to help meet your end-of-year tax liability. For most people, tax is calculated at your expected marginal tax rate, including the Medicare levy, less a 30% offset. The fact sheet’s example: if your rate is 39% including Medicare levy, 9% tax is withheld (39% − 30%).

Eligibility

You must:

• be 18 or older;
• have never owned property in Australia, unless you qualify under the financial hardship rules (this includes investment property, vacant land, commercial property, some land leases and company title interests);
• plan to live in the home you buy or build;
• have made eligible voluntary contributions; and
• not have already withdrawn money through the scheme.

There is no requirement to be an Australian citizen, an Australian resident or a resident for tax purposes. Couples, siblings or friends can each use their own contributions for the same property. If one of you is ineligible because of earlier property ownership, it does not stop the others applying. Your name must be on the title of the property you purchase.

Steps and deadlines

1. Check you are eligible and make eligible contributions.
2. Request an FHSS determination through the ATO’s online services. You must do this before your property contract is completed (generally at settlement) and ownership transfers to you. The maximum amount appears on screen straight away. Check your contributions against your super fund’s records, not your payslip.
3. Make a release request when you are ready. You can submit only one release request, so include the total you want. If you have already signed a contract, you have 90 days from the contract date to lodge the release request. Payment usually takes 15 to 20 days when there are no issues.
4. Tell the ATO within 90 days of signing a contract to buy or build. The ATO may allow an extension.

If you do not buy within 12 months

You have 12 months after requesting a release to sign a contract to buy or build, or to put the money back into your super. The ATO will generally grant an automatic 12-month extension, confirmed in writing, but the time cannot be extended past 24 months from the date you asked to withdraw. You cannot apply for the scheme again, even if you recontribute the money.

If you owe money to the ATO or another agency, your release amount may be used to pay that debt. Amounts released will not reduce your HELP or similar study loan balance, but an overdue income tax debt (including a compulsory study loan repayment) can be paid from your release.

Which professional to consult

A registered tax professional can tell you how contributions and deductions affect your return. Your super fund confirms whether it releases amounts and at what cost. A mortgage broker helps plan the deposit alongside the 5% Deposit Scheme (mortgage brokers).