The mechanic.
You make voluntary contributions to your super fund — either as salary sacrifice (concessional, pre-tax) or from after-tax money (non-concessional). Later, you apply to the ATO to release those contributions (plus deemed earnings) to fund your first home deposit.
The win: concessional contributions are taxed at super’s flat 15% rate instead of your marginal rate (up to 45% + 2% Medicare = 47%). That gap — up to 32 percentage points — is the tax benefit.
Contribution limits.
- Up to $15,000 per financial year can be designated as FHSS-eligible.
- Up to $50,000 total per person can be released across multiple years.
- Employer SG contributions (the 11.5% mandatory) don’t count — only voluntary contributions are eligible.
- Per-person limit means a couple can release up to $100,000 combined.
Contributions must stay in super for at least one full financial year before you can release them — this is why starting 12+ months before you plan to buy matters. Last-minute FHSS attempts are the #1 missed opportunity.
The benefit at each tax bracket.
| Your marginal rate | Tax on $50K contribution (outside super) | Tax inside super | Net benefit |
|---|---|---|---|
| 16% | $8,000 | $7,500 | ~$500 |
| 30% | $15,000 | $7,500 | ~$7,500 |
| 37% | $18,500 | $7,500 | ~$11,000 |
| 45% | $22,500 | $7,500 | ~$15,000 |
Rough estimates — withdrawal itself attracts a small adjustment (marginal rate minus 30% offset on deemed earnings), but the core dynamic holds. At 16% marginal, FHSS is barely worth the paperwork. At 37%+, it’s material.
The release process — 4 to 6 weeks.
- Make voluntary contributions to your super (salary sacrifice or lump sum).
- Wait at least one full financial year from first contribution.
- Apply to the ATO for an FHSS determination — confirms the amount you can release. This step is requiredbefore signing a property contract. Once you’ve signed a contract you have 14 days to apply for the determination or you lose eligibility.
- Request release of funds. ATO coordinates with your super fund.
- Funds transferred to your nominated bank account. Released amount (plus deemed earnings) is treated as assessable income in the year of release, but you receive a 30% tax offset on deemed earnings portion.
Most-missed step: applying for the determination after signing a contract. Get the determination in hand before you go to auction or make an offer.
Combining FHSS with other FHB schemes.
FHSS stacks. It doesn’t conflict with:
- Home Guarantee Scheme — released FHSS funds count toward the 5% deposit. Most common pairing.
- State FHB stamp duty concessions — automatic at settlement based on price, independent of FHSS.
- First Home Owner Grant — state cash grants on new builds, independent.
Stacked, a couple both on 37% marginal rates contributing max FHSS + using HGS + a state FHB concession can save $40K-$60K total over non-scheme buyers.
When FHSS doesn’t make sense.
- You’re on the 16% bracket and the benefit is marginal (~$500 on a $50K contribution).
- You’re buying in under 12 months — contributions won’t clear the minimum holding period.
- You’ve already owned property in Australia (you’re not a first home buyer; FHSS disqualifies you).
- You’re planning to buy an investment property rather than a PPOR (FHSS is owner-occupier only).
- You’re over the concessional contribution cap ($30,000/yr including SG); excess contributions taxed at your marginal rate minus 15%.
The short version.
FHSS saves $7,500-$15,000 of net tax per $50,000 contribution, depending on your marginal rate. Start 12+ months before your target purchase date. Get an FHSS determination before signing a contract. Stacks cleanly with HGS + state FHB concessions — don’t pick one, do all three.
For the full FHB stack strategy, see our 2026 first home buyer guide.
Next step