What is the FHSS Scheme?
The FHSS scheme is an Australian government initiative created to help first-time home buyers save for a deposit.
Under the FHSSS, you can make voluntary before- or after-tax contributions to your super fund with a view to save for your first home. By contributing to your super account rather than a regular savings account, you can benefit from a lower tax rate and potentially save faster. If you are eligible, you can later withdraw these contributions and associated earnings to use for your first home deposit in Australia.
How the FHSSS works
How much can you withdraw from your super account under the FHSSS?
If you’re eligible for the FHSS scheme, you can apply to receive a maximum of $15,000 of your voluntary contributions (made on or after 1 July 2017) from each financial year and a total of $50,000 across all years. If your application is approved, we’ll release eligible contributions plus any associated earnings as calculated by the ATO.
Note: Associated earnings are a notional amount of earnings calculated by the ATO.
Note that depending on the price of your property or land, you may need additional savings to meet your deposit goal and cover other home-buying expenses such as stamp duty and legal fees.
Who is eligible for the FHSS scheme?
To meet the eligibility criteria for the FHSSS, you must:
- be aged 18 years or over (you can start making voluntary contributions earlier)
- be buying or building your first residential property in Australia
- plan to live in the home for at least 6 of the first 12 months of ownership.
Other eligibility criteria may apply. Visit the ATO website for more information.
How to make super contributions under the FHSSS
Before-tax contributions
This includes salary sacrifice and any personal after-tax contributions you claim tax deduction for.
A salary sacrifice is a before-tax contribution to your super fund, taxed at 15%, which is generally lower than your income tax rate.
These concessional contributions are deducted from your pay before you receive it, potentially reducing your taxable income.
You can make a one-off salary sacrifice contribution or decide to make regular contributions by agreement with your employer.
After-tax contributions
You can make after-tax contributions from your take-home pay directly into your super account.
These contributions may also be known as non-concessional contributions, personal contributions or voluntary after-tax contributions.
Important things to consider
If you are thinking about using the FHSS scheme to save for your first home, keep the following key points in mind.
Contribution caps
Caps on super contributions apply. Read more about the caps that apply to super, including on the after-tax contributions cap.
Ineligible contributions
You can't include Superannuation Guarantee contributions made by your employer, the government co-contribution, or spouse contributions in your FHSS determination.
If you include these in your FHSS determination, your request may be cancelled or delayed.
For more information on what contributions can be classified as eligible or ineligible under the FHSSS, please. Visit the ATO website.
Property requirements
The property must be residential. Under the scheme, residential does not include houseboats and mobile homes. Vacant land is allowed if you’re going to build on it and live in the property for at least 6 of the first 12 months of ownership.
Single use of the FHSS scheme
You can only access your super funds under the FHSS scheme once, even if the amount you originally withdrew is less than the maximum allowable limit.
Timeframe for using FHSSS funds
If you don’t sign a contract to buy or build a home within a year of withdrawing your contributions, you can either transfer the money back into super (less any tax withheld) or keep it and pay tax equal to 20% of the amount. The ATO can extend this timeframe for a further 12 months if needed.
Defined Benefit Division (DBD) members
Defined Benefit Division (DBD) members can only release voluntary contributions from their accumulation component (not employer contributions or default member contributions to the defined benefit component) as part of the FHSSS.
Ask an expert
Our super consultants can provide information and general advice on a range of topics at no extra cost.
You don’t have to be a UniSuper member to meet with a super consultant.
Book an appointment in-person, online or over the phone, or call 1800 823 842.
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Things you need to know
The information is of a general nature and doesn’t consider your personal circumstances. Before making decisions, you should consider whether the information is appropriate for your circumstances otherwise seek financial advice.