First Home Super Saver Scheme (FHSS) in Sydney

The First Home Super Saver (FHSS) scheme lets you make voluntary contributions into your superannuation and later withdraw them — along with deemed earnings — to put towards your first home deposit. Because money inside super is taxed at 15% rather than at your marginal rate, most working Australians can accumulate a larger deposit faster than in a standard savings account. Individuals can withdraw up to $50,000; couples buying together can combine for a pre-tax release of up to $100,000.

In Sydney — where a 10% deposit on a median-priced home often means $100,000 or more — every dollar saved matters. FHSS will not hand you a deposit on its own, but for buyers who start early it can add tens of thousands of dollars at a materially lower tax cost than saving outside super.

The First Home Super Saver Scheme (FHSS) is an Australian Government initiative introduced on 1 July 2017. It allows eligible first home buyers to make voluntary contributions into a superannuation fund, and later request that those contributions — plus associated earnings — be released and used as a home deposit.

The scheme is administered by the Australian Taxation Office (ATO). You apply for and manage everything through your myGov account linked to the ATO. Your super fund is not involved in the application, but they are required to release the funds once the ATO issues a release authority.

Key facts at a glance:

Source: ATO, First Home Super Saver Scheme (updated 2 January 2026). SIC rate updated quarterly.

The core mechanism is simple: you save inside super instead of a bank account, take advantage of super's lower tax rate while accumulating, then pull the money out when you are ready to buy.

The FHSS benefit is driven by: (1) the tax saving on the way in, and (2) the deemed earnings rate on the way out.

On the way in — lower contribution tax:

When you salary sacrifice $15,000 into super, it is taxed at 15% rather than at your marginal rate. For someone earning $90,000 (marginal rate 32% including Medicare), salary sacrificing $15,000 saves approximately $2,850 in income tax that year compared to saving the equivalent after-tax amount.

2025-26 Australian tax brackets (excluding Medicare levy):

Plus 2% Medicare levy for most residents.

On the way out — 30% tax offset:

Concessional contributions and deemed earnings are included in your assessable income for that year, but a 30% tax offset applies. For someone on $90,000 (32% marginal + Medicare), effective withdrawal tax on the assessable portion is about 2%. Non-concessional contributions are not taxed at withdrawal.

Deemed earnings:

The ATO applies deemed earnings at the shortfall interest charge (SIC) rate — 90-day bank bill rate plus 3%, updated quarterly. Current rate 6.61% p.a. (Oct–Dec 2025). This is a notional figure regardless of what your super fund actually earned.

Eligibility is assessed on an individual basis. In a couple buying together, each person's eligibility is assessed separately. Each eligible person can access their own FHSS savings toward the same property.

You must meet all of the following at the time you request an FHSS determination:

• You are 18 years old or older. You can make contributions before 18, but you must be at least 18 when you request the determination.
• You have never owned property in Australia. This includes residential, investment, vacant land, commercial property, lease of land, and company title. The test covers all property in Australia.
• Your name will be on the title. The property you purchase must be in your name.
• You have not previously made a completed FHSS release request. The scheme is once-only per person.

There is no income test — unlike Help to Buy. There is no citizenship or residency requirement — unlike the 5% Deposit Scheme; FHSS is open to temporary residents and non-residents.

Only voluntary contributions made on or after 1 July 2017 are eligible.

Eligible:

• Voluntary concessional (salary sacrifice, or personal contributions you claim a deduction for)
• Voluntary non-concessional (after-tax, no deduction)
• Certain transfers from foreign super (e.g. KiwiSaver), subject to specific rules

Ineligible (cannot be released under FHSS):

• Employer compulsory SG contributions
• Government co-contributions, spouse contributions, contribution-splitting
• Defined benefit or constitutionally protected funds
• Excess contributions above caps, COVID-19 early release re-contributions
• Contributions made before 1 July 2017

Limits:

• Maximum per financial year: $15,000
• Maximum total from 1 July 2017: $50,000 per person
• At withdrawal: 85% of concessional contributions + 100% of non-concessional count toward your release amount

All concessional contributions (including employer SG) count toward the $30,000 annual concessional cap (2025-26). Check your available cap before salary sacrificing. Carry-forward rules can allow more in one year, but the FHSS annual limit of $15,000 still applies.

FHSS can be used to purchase or build residential property in Australia that you intend to live in as your primary residence.

You can use FHSS to buy:

• An established home
• A newly built home or off-the-plan apartment
• A house and land package (construction contract)
• Vacant land + construction contract (timing rules apply — see below)

You cannot use FHSS to buy:

• Vacant land on its own (unless with a construction contract within 12 months, and you haven't taken title before requesting determination)
• A houseboat, motorhome, or mobile home
• Any premises not capable of being occupied as a residential dwelling

For determinations made on or after 15 September 2024:

• You can make a release request before you sign a property contract, or within 90 days of signing a contract to purchase or construct a home.
• If you request release more than 90 days after signing, you will be subject to the 20% FHSS flat tax on the assessable amount.
• You must notify the ATO within 90 days of signing the contract via myGov (Super → Manage → First Home Saver).
• One release only. You cannot amend the amount upward after requesting release.
• Request your determination early; you can request multiple determinations over time. Request a fresh one before you buy to capture the latest release amount.

12 + 12 month purchase window:

From the date you request a release, you have 12 months to sign a contract. The ATO automatically grants a further 12 months in most cases (24 months total). If you reach 24 months without signing, you must recontribute the assessable amount to super or pay the 20% FHSS flat tax. Once you have requested a release, the scheme is used — you cannot request it again.

Release timing:

The ATO takes 15–20 business days to process a release. In Sydney's auction market with 42-day settlements, request your determination well before auction day and submit your release request as soon as you have exchanged. Outstanding Commonwealth debts (ATO, Centrelink, Child Support) will be offset from your release before you are paid — check your debt position first.

Assessable:

• All concessional contributions in your release (at 85% of eligible concessional)
• All deemed earnings on both concessional and non-concessional contributions

Not assessable:

Non-concessional contributions (already taxed before entering super).

The ATO withholds tax using your expected marginal rate (including Medicare) minus the 30% offset, or 17% if it cannot estimate. When you lodge your tax return for the year you requested the release, the ATO recalculates and adjusts. The assessable FHSS amount is not counted for family assistance or child support.

Practical effective withdrawal rates:

For most Sydney first home buyers (income $60,000–$130,000), effective tax on the assessable FHSS amount at withdrawal is approximately 2%. The released FHSS amount is NOT included in your HECS/HELP repayment income in the year you withdraw; but salary sacrifice contributions in other years ARE counted as RESC for HELP. Plan accordingly.

By withdrawing voluntary contributions from super early, you reduce the compound growth that would otherwise occur over decades. For most first home buyers, getting into the property market earlier is viewed as producing stronger long-term wealth outcomes than keeping extra super invested. Property is also a form of compulsory saving via mortgage repayment. This is a personal calculation — particularly for high earners or those many years from retirement.

If you do not release contributions under FHSS, they remain part of your super and are inaccessible until you meet another condition of release (e.g. retirement). Making FHSS contributions does not oblige you to use them — you can contribute for years and then decide not to activate the release. We recommend speaking with a licensed financial adviser if you have concerns; RyRo can connect you with trusted financial planning professionals.

FHSS can be used alongside most other NSW and federal first home buyer programs. Stacking is legal and encouraged.

• FHSS + NSW FHOG: The $10,000 grant for new homes (up to $600,000 in NSW). FHSS and FHOG are separate; a couple can use both plus both partners' FHSS (up to $100,000 combined) toward the same purchase.
• FHSS + NSW FHBAS (Stamp Duty): Full exemption up to $800,000, concessional to $999,999. FHSS and FHBAS stack cleanly.
• FHSS + 5% Deposit Scheme: From 1 October 2025, no income caps or place limits; Sydney cap $1.5M. Your FHSS release forms part of your deposit. The 5% scheme requires Australian citizenship or PR; FHSS does not.
• FHSS + Help to Buy: Your FHSS release can form part of your 2% deposit. You cannot use Help to Buy and the 5% Deposit Scheme at the same time — choose one.

FHSS is federal and applies equally in all states including NSW. Using FHSS does not affect NSW scheme eligibility.

1. Your super fund may not release FHSS. Defined benefit and some government funds do not. Confirm with your fund before contributing; consider consolidating to an eligible fund if needed.
2. Mismatched name/address. Your details with the super fund must exactly match the ATO. Fix before you contribute.
3. Signing a contract before requesting a determination. You need a determination before ownership transfers (before settlement). You can sign then request release within 90 days — but don't leave it until the week before settlement.
4. Exceeding the concessional cap. Employer SG + salary sacrifice count toward the $30,000 cap. Breaching the cap wipes out FHSS benefit. Calculate available cap first.
5. Not checking the release amount. The determination is pre-filled from fund data; errors can mean a lower amount or delays. Check every entry against your super statements.
6. Forgetting the 15–20 business day window. In Sydney's auction market, request release before auction day so funds are in your account before settlement.
7. One release only. Even if you withdraw less than your maximum, you cannot come back for more. Request the full amount you need.
8. Outstanding Commonwealth debts. ATO, Centrelink, and Child Support debts are offset from your release. Get affairs up to date first.
9. HECS/HELP and salary sacrifice. RESC is included in HELP repayment income; this can increase your compulsory repayment. Model the net effect.
10. Division 293 for high earners. Income + concessional contributions over $250,000 triggers an extra 15% tax and erodes the FHSS benefit.

Before you start contributing:

1. Confirm your super fund participates in FHSS and will release amounts.
2. Check name, address, and TFN match between fund and ATO.
3. Calculate available concessional cap: $30,000 (2025-26) minus employer SG.
4. Decide strategy: salary sacrifice, personal after-tax, or personal deductible contributions.

While saving:

5. Make voluntary contributions up to $15,000/year for FHSS.
6. Monitor via your super portal or ATO Online Services.
7. No need to notify anyone — simply contribute.

When ready to buy:

8. Log in to myGov → ATO → Super → Manage → First Home Saver.
9. Request an FHSS determination; check pre-filled data. You'll see your maximum release amount.
10. Optionally request determination before you start looking, then request release when you're ready to exchange.

After exchange (or before):

11. Submit your FHSS release request (amount, fund(s), bank account). One shot — request the full amount you need.
12. If you signed a contract: for determinations from 15 Sept 2024, you have 90 days from contract date to request release.
13. Notify the ATO within 90 days of signing via myGov.

After release:

14. Wait 15–20 business days for funds.
15. Use funds toward settlement.
16. Lodge your tax return for the year of the release request; include assessable FHSS amount and apply the 30% tax offset.

Reasons it works well:

• Tax advantage for middle-income earners is real — effective withdrawal tax ~2% for the 30% marginal band.
• No citizenship requirement — accessible to PRs and some visa holders.
• Couples can combine for up to $100,000 pre-tax release.
• Deemed earnings rate (~6.6%) has been above many savings accounts.
• Stacks cleanly with FHOG, FHBAS, and the 5% Deposit Scheme.

Reasons it may not suit you:

• Sydney prices have outpaced FHSS limits — $50k/$100k is one component, not the full deposit.
• It is complex: myGov, determination, release, contract timing, tax return, super fund coordination.
• It takes time — over three years at $15k/year to reach the $50k cap.
• Money is illiquid; if plans change you recontribute or pay 20% FHSS tax.
• High earners near Division 293 benefit less; HECS/HELP holders need to model carefully.

Verdict: For a Sydney buyer on middle income ($60,000–$130,000), with 2–3 years before they plan to buy, and without a large HECS/HELP debt or complex situation, FHSS is generally worth using. Start early, maximise each year, and treat it as one part of a multi-scheme deposit strategy.

FHSS is federal, so rules are identical across Australia. Sydney's property market shapes how useful it is.

• Larger deposit requirements: A 10% deposit on an $800,000 townhouse is $80,000; 20% is $160,000. Even $100,000 combined FHSS for a couple is less than 20%. FHSS works best combined with the 5% Deposit Scheme, FHBAS, and personal savings.
• House and land packages: In northwest Sydney (Box Hill, Schofields, Marsden Park, Rouse Hill), FHSS works well — long build timelines let you accumulate the full $50k. Request your determination before title transfers on the land. Sumit works with many house and land buyers in these corridors.
• Off-the-plan: With settlement 2–4 years from exchange, you have time to maximise contributions. Request your determination before the settlement date when ownership transfers.
• Essential workers: Nurses, teachers, police in Greater Western Sydney often find FHSS especially useful with the FHBAS stamp duty exemption (strong under $800,000).

The FHSS scheme is managed by the ATO — a broker does not administer the application. But a broker adds value in four ways:

1. Assessment: Sumit can assess whether FHSS suits your income, HECS/HELP debt, and employer contribution level before you start contributing. Getting this wrong costs months or an unexpected tax outcome.
2. Timing: Releasing FHSS in line with your property transaction is a common failure point. Sumit has run this for Sydney buyers across auctions, private sales, house and land, and off-the-plan. He knows when to request the determination and release so funds arrive before settlement.
3. Stacking: Combining FHSS with FHBAS, FHOG, and the 5% Deposit Scheme requires knowing which schemes your property and situation qualify for. A broker who handles all four ensures you don't lose eligibility by misunderstanding interactions.
4. Local knowledge: Sumit is based in Norwest and works with first home buyers across Castle Hill, Kellyville, Baulkham Hills, Rouse Hill, Blacktown, Parramatta, Penrith, and Greater Western Sydney. He understands local pricing and which price brackets maximise your stamp duty exemption.

2+ years before you buy:

• Confirm your super fund will release FHSS amounts
• Confirm name, address, TFN match between fund and ATO
• Calculate available concessional cap ($30,000 minus employer SG)
• Set up salary sacrifice or plan personal contributions
• Contribute up to $15,000 per year toward FHSS cap
• Consider HECS/HELP impact if relevant

6–12 months before you want to buy:

• Request a current FHSS determination via ATO Online Services
• Check all pre-filled contributions for accuracy
• Confirm maximum release amount and how it fits with your total deposit plan (FHSS + savings + FHBAS + FHOG + 5% scheme)

When you find a property (before auction/exchange):

• Request FHSS release before auction day if buying at auction
• Allow 15–20 business days for funds to reach your account

After exchange:

• If you exchanged before requesting release: request within 90 days of contract signing
• Notify the ATO of your contract via myGov within 90 days
• Use FHSS funds toward settlement deposit or final balance

At tax time:

• Include assessable FHSS released amount and tax withheld on your return for the year of the release request
• Apply 30% tax offset on the assessable amount
• Check if any HECS/HELP adjustment is needed