First Home Super Saver (FHSS)
A scheme allowing first home buyers to save for a deposit inside super, benefiting from lower super tax rates on contributions.
The First Home Super Saver Scheme (FHSS) allows first home buyers to save for a home deposit inside their super fund, taking advantage of the concessional tax treatment of super. You can make voluntary contributions (both concessional and non-concessional) of up to $15,000 per year and $50,000 in total, then withdraw these amounts (plus deemed earnings) when you're ready to buy your first home.
The tax benefit works because concessional contributions are taxed at just 15% inside super, compared to your marginal rate outside super. When you withdraw under the FHSS, the concessional amounts are taxed at your marginal rate minus a 30% offset. For someone on the 30% marginal rate, the effective tax on withdrawal is 0% (30% - 30% offset), compared to 30% if they'd saved outside super. The net result is a faster path to a deposit.
To apply, you request a FHSS determination from the ATO (to check your eligible amount), then request a release of funds. You must sign a contract to purchase or construct a home within 12 months of the release (extensions available up to a further 12 months). The property must be a residential premises you intend to live in as soon as practicable, and you must occupy it for at least 6 of the first 12 months. You cannot have previously owned property in Australia (including investment property).