First Home Super Saver Scheme


  • Eligibility and conditions
  • FHSS determination
  • Failure by individual to enter into contract to purchase or construct a home

The First Home Super Saver Scheme (FHSS Scheme) was launched to help individuals save for their first home by allowing them to build up superannuation savings to use as a deposit. From 1 July 2022, individuals saving for their first home can contribute up to $50,000 (up to $15,000 in any one year) into superannuation and withdraw the contributions to use as a deposit.

If you requested a release before 1 July 2022, when the total limit across all years was $30,000, you cannot make any further requests to take you up to the current $50,000 limit. Withdrawn contributions and deemed earnings on the contributions may be taxed at the contributor’s marginal tax rates less a 30% offset. The released contributions under the FHSS scheme may be used to buy a new or existing home in Australia.

Contributions and determinations

  • Superannuation guarantee contributions made by your employer, and spouse contributions cannot be released under the FHSS scheme.
  • You must apply for and receive a FHSS determination from us before signing a contract for your first home or applying for release of your FHSS amounts.
  • Make sure you correctly enter each of your eligible contributions for all years into the FHSS determination form. Do not total the contributions.
  • If there is an error in your FHSS determination you can correct this by requesting another determination, provided you haven’t signed a contract or requested a release.
  • If there is incorrect information in your FHSS determination and you later request a release based on that incorrect information, your request may be delayed. Your release may also be cancelled and this may affect your eligibility for the scheme.
  • Limits apply to the eligible contributions that count towards your maximum releasable amount.
  • You can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year included in your eligible contributions to be released under the FHSS scheme, up to a total of $50,000 contributions across all years. You will also receive a deemed amount of associated earnings that relate to those contributions – this is not the actual investment earnings on those contributions.

Release requests

  • You can only request a release under the FHSS scheme once.
  • It may take between 15 to 20 business days for you to receive your money after you make your release request. Please consider this timing before you start your home buying activities.
  • You have to make your release request within 14 days of signing a property contract. However, before signing any property contract you must have a FHSS determination.

Some things to know

  • The home you purchase or build must be located in Australia.
  • You can sign your contract to purchase your property after you make a valid release request.
  • If you have an outstanding debt with the ATO or another Commonwealth agency, your FHSS release amount may be offset against this debt. Payment of your FHSS amount could be delayed or reduced (including to nil) or both if you have an outstanding Commonwealth debt.
  • You have 12 months from the date you make a valid release request to notify us if you have signed a contract to purchase or construct your home or recontribute the required amount to your super fund.
A house driveway at sunset.

Eligibility and conditions

Eligible individuals

The FHSS Scheme is designed to provide financial assistance to individuals who are genuinely saving for their first home. The only individuals who can participate are those who:

  • are aged 18 years or older
  • have not previously held a freehold interest in real property, a long-term lease of land or a company title interest in land in Australia, unless the Commissioner determines they have suffered financial hardship and should be eligible to participate, and
  • have not previously requested the release of superannuation contributions under the FHSS Scheme

The Commissioner’s view is that the meaning of “freehold interest” in the FHSS Scheme should include any type of interest in the relevant real property that is both legal and equitable interests. This means that an individual can acquire a freehold interest in the form of an equitable proprietary right before settlement or completion of a contract. The Commissioner’s view is expressed in an amendment to Law Companion Ruling LCR 2018/5 which applies generally from 1 July 2022.

Although an individual must generally never have held an ownership in Australian real property to be eligible, an individual who has held such an interest can still qualify if the ATO determines that they have suffered a “financial hardship”.

The ATO is required to make such a determination if:

  • an individual requests that the ATO do so,
  • financial hardship suffered by the individual caused them to no longer hold the property interests, and
  • the individual has not later held any other such property interests

To be eligible, an individual is not required to be an Australian citizen or Australian resident for tax purposes.

Eligible contributions

To be classify as “eligible” contributions for an individual, contributions must have been made:

  • as voluntary employer contributions (such as salary sacrifice contributions but not including compulsory employer contributions) or voluntary contributions made by the individual, and
  • as concessional contributions within the concessional contributions cap for the year ($27,500 for 2023–24 and 2022–23) or as non-concessional contributions within the non-concessional contributions cap for the year ($110,000 for 2023–24 and 2022–23).

The requirement that a contribution is a concessional or non-concessional contribution prevents a contribution that is not counted towards an individual’s contribution caps from being eligible, such as structured settlement contributions or small business CGT contributions. Excess concessional contributions are disregarded in working out an individual’s non-concessional contributions for FHSS Scheme purposes. Contributions must not have been made in respect of a defined benefit interest or be made to a constitutionally protected fund.

Limit on eligible contributions
A $15,000 limit applies to the contributions that can be eligible from any one financial year and, from 1 July 2022, a $50,000 limit applies to the total contributions that can be eligible across all years. Before 1 July 2022, total eligible contributions were limited to $30,000.

FHSS maximum release amount
From 1 July 2018, eligible individuals can apply to withdraw up to their “FHSS maximum release amount”, which is the sum of the individual’s:

1. “FHSS releasable contributions amount”, and
An individual’s “FHSS releasable contributions amount” is the sum of their FHSS eligible non-concessional contributions for the year and 85% of their FHSS eligible concessional contributions for the year.

In working out which contributions are counted towards an individual’s FHSS releasable contributions amount, the ordering rules provide that:

  • contributions are counted in the order in which they were made, that is from earliest to latest, and
  • if an eligible concessional contribution and an eligible non-concessional contribution are made at the same time, the non-concessional contribution is taken to have been made first.

2. “associated earnings”
An individual’s “associated earnings” are calculated on the FHSS releasable contributions amount on a daily basis, generally from the beginning of the month in which the contribution is made (or is taken to have been made under the ordering rule) to the date of the determination.

Associated earnings are calculated on a compounding basis based on the shortfall interest charge rate which is essentially the 90-day Bank Accepted Bill rate with an uplift factor of 3%).

A house with a white picket fence at dusk, representing the concept of first home super saver scheme.

FHSS determination

To initiate the process for the release of eligible contributions, an eligible individual requests that the Commissioner make an FHSS determination. The determination must be received before an individual can sign a contract for their first home or apply for the release of an FHSS amount. An application is made online via an individual’s myGov account.

An FHSS determination is a written determination stating:

  • the individual’s “FHSS maximum release amount”; and
  • the amount of the individual’s concessional contributions, non-concessional contributions and associated earnings that make up their FHSS maximum release amount. The Commissioner must make an FHSS determination if an individual makes a valid request.

Release authority

An individual who receives an FHSS determination has 60 days to request that the Commissioner issue a release authority to a nominated superannuation fund/s for an amount up to the FHSS maximum release amount identified in the FHSS determination. Specifying an amount up to the maximum release amount allows an individual to leave amounts in superannuation if they choose to do so. An individual can only request a release once.

Payment of FHSS Scheme amounts to the individual

In accordance with the rules in Div 131, when the individual’s superannuation fund receives the release authority, it must pay the amount to be released to the Commissioner, who would pay an amount to the individual who made the request. The Commissioner must withhold an amount from the payment to the individual. The amount withheld would be based on an estimate of the amount of tax payable in relation to an individual’s assessable FHSS amount, taking into account recent notices of assessment, PAYG withholding amounts from the employer and other relevant information.

Regulation 53A of the Taxation Administration Regulations 2017 states that, if the ATO cannot make an estimate of an individual’s marginal tax rate, 17% of the assessable FHSS released amount should be withheld. This default 17% rate is based on the maximum amount of tax the individual would be expected to pay on the FHSS released amount if they were on the top marginal tax rate (47%) less a 30% rebate. If the individual is not on the top marginal tax rate, the difference in the amount withheld and the actual tax liability would be refunded through the assessment process. After tax is withheld, the released amount could be reduced further if the individual has debts to the ATO or other Commonwealth agencies such as the Child Support Agency.

Income tax treatment of amounts released

Concessional contributions of released amounts and associated earnings that are withdrawn are included in the contributor’s assessable income and benefit from a non-refundable offset equal to 30% of the contributor’s assessable FHSS released amount for the income year. For released amounts of non-concessional contributions, only the associated earnings are taxed, with a 30% tax offset.

Although superannuation contributions released by the Commissioner may be included in an individual’s assessable income, they are not taken into account for other income tests. They are not, for example, included in the calculation of HELP repayment income, income for surcharge purposes which applies to Division 293 tax, total income for government co-contribution purposes or in calculating entitlement to the low income superannuation tax offset.

Contract to purchase or construct a home

Once an individual receives an FHSS determination and has made a valid request, the individual may enter into a contract to purchase or construct residential premises in Australia. They are not required to wait until they receive their released amount before entering into the contract, but once a contract has been entered into they have a maximum of 14 days to apply for the release of their money.

The purchase or construction contract may be entered into within the period beginning 14 days before they make the valid request and ending 12 months after the day they make the valid request. The price of the purchase or construction must be at least equal to the released amount, and the home must be occupied as soon as practicable and for at least 6 months of the first year after it is practicable to do so.

A request to release an amount is only valid if made to the Commissioner on or after 1 July 2018, and the contract to purchase or construct the residential premises to which the valid request relates must also be entered into on or after 1 July 2018. The Commissioner must generally be notified of the matters within 28 days after the individual enters into the contract to purchase or construct the residential premises.

A blue house with a yellow door and a white picket fence, representing the concept of first home super saver scheme.

Failure by individual to enter into contract to purchase or construct a home

An individual who does not enter into a contract within the required period to purchase a home or vacant land on which to construct a home may:

  • apply for an extension up to a further 12 months
  • notify the Commissioner that they have re-contributed an amount into superannuation, or
  • pay FHSS tax.

Notification of a re-contribution can only be made if the individual makes one or more non-concessional contributions during the period that they were required to enter into a contract, and the total amount of the non-concessional contributions is at least equal to their assessable FHSS amount less any amounts that were withheld by the Commissioner. A re-contributed contribution is specifically stated to not be deductible, and it is therefore a non-concessional contribution.

Liability to first home super saver tax

Individuals are liable to pay first home super saver tax (FHSS tax) if:

  • they do not enter into a contract to purchase or construct residential premises or re-contribute the required amount into superannuation, or
  • they do not notify the Commissioner that they have purchased residential premises or re-contributed the required amount into superannuation.

FHSS tax is imposed by the First Home Super Saver Tax Act 2017 and is equal to 20% of an individual’s assessable FHSS released amounts. An individual’s assessed FHSS tax is due and payable at the end of 21 days after the Commissioner gives the individual a notice of assessment of the tax. If the Commissioner amends an individual’s assessment, any extra assessed FHSS tax is due and payable at the end of 21 days after the Commissioner gives the individual a notice of the amended assessment. Individuals who fail to pay an amount of assessed FHSS tax by the time it is due and payable are liable to general interest charge for each day in the period over which the amount is due and unpaid.

Proposed amendments to FHSS scheme

The Treasury Laws Amendment (2023 Measures No 3) Bill 2023, which was introduced into parliament on 14 June 2023, proposes a number of amendments to the FHSS scheme generally applicable from 1 July 2018. These include:

  • increasing the discretion of the Commissioner to amend or revoke an FHSS scheme application, ie a request for an FHSS scheme determination or a request for a release authority — currently, individuals are not able to amend or revoke their FHSS scheme applications
  • allowing individuals to withdraw or amend their FHSS scheme applications before receiving an FHSS scheme amount, and allowing those who withdraw to re-apply for FHSS scheme releases in the future
  • allowing the Commissioner to return any FHSS scheme amounts to superannuation funds, provided the amount has not yet been released to the individual
  • clarifying that FHSS scheme amounts returned by the Commissioner to superannuation funds are treated as the funds’ non-assessable non-exempt income, are afforded appropriate status in terms of their tax free and taxable components and do not count towards individuals’ contribution caps
  • allowing individuals 90 days to request a release authority after they enter into a contract to purchase or construct a home — currently, individuals must make the request within 14 days, and
  • as a transitional measure for 3 years, extending the flexibility provided by the amendments to FHSS scheme users who have had an FHSS determination made in relation to them before the commencement of the amendments and who have since started holding a relevant interest in real property or land — rather than their holding of the relevant interest preventing them from taking advantage of the amendments, they may be able to release an FHSS scheme amount up to the maximum amount they could have released when the original determination was made.

This article is general information only and does not provide advice to address your personal circumstances. To make an informed decision you should contact an appropriately qualified professional.