19/10/2026
Are you a first home buyer ? Then you should be saving using the First Home Super Saver Scheme.
For many Australians, owning their own home has never felt further away.
Research published last week found that 51 per cent of aspiring first-home buyers have given up on ever buying a home.
It is easy to see why. House prices may have been falling for the past six months, but that has barely made a dent in a multi-decade boom in property prices.
Several government schemes have been set-up to help Australians get into their first home. Eligible buyers can use the federal government’s First Home Guarantee to purchase with a 5 per cent deposit without paying lenders mortgage insurance and many state governments now offer first homeowner grants or shared equity schemes.
Yet, I think one of the most useful schemes remains under-utilised – the First Home Super Saver Scheme.
Boost your deposit
The scheme lets eligible first-home buyers withdraw some voluntary super contributions, plus earnings calculated by the ATO, to put towards their first home.
You can contribute up to $15,000 a year, up to a total of $50,000. Contributions can be concessional, such as salary sacrifice, or non-concessional, made from after-tax income. Compulsory employer contributions don’t count.
This money gets all the tax benefits of Superannuation – in particular, concessional contributions being taxed at 15 per cent rather than your marginal tax rate.
Then, when you’re ready to buy your first home, you apply to the ATO to withdraw that money and use it for your deposit. Rather than looking at the actual growth of your Super, the ATO applies a deeming rate – currently 7.51 per cent – so you can withdraw your contributions and the amount the ATO has deemed it to have grown.
There is a double win here for first home buyers. Concessional contributions are taxed at 15 per cent rather than your marginal tax rate. Then, your money grows at the deemed rate which is generally higher than the interest rate on your high interest savings account. So, you’re saving on tax while also earning more.
The super trick that could double your home deposit.
The super trick that could double your home deposit.
Don’t undermine your Super
Regular readers of my column might be surprised I’m advocating for using a scheme that takes money out of Super. I believe Super is one of the most powerful tools Australians have to build wealth and I am strongly against proposals to withdraw compulsory Super.
Yet, the First Home Super Saver Scheme is different. It only lets you access eligible extra contributions. This is additional money you’ve contributed with the intention to pull it out for a home deposit, not your employer’s compulsory contributions intended to set you up for a comfortable retirement. And these additional contributions can go a lot further in a Super environment than outside it.
What difference could it make?
Take someone earning the median Australian salary of $74,100. Imagine they set aside $5000 of before-tax pay at the end of each year for 10 years. Assume they pay income tax at 30 per cent, plus the 2 per cent Medicare levy.
Outside super, $5000 of before-tax pay becomes $3,400 after tax. If their savings account earns 5 per cent and is also taxed at their marginal tax rate, the balance would be about $39,700 after 10 years.
If the $5000 instead went into super as a concessional contribution, $4250 would remain after 15 per cent contributions tax. If the ATO’s 7.51 per cent deeming rate stayed constant for the decade, the releasable amount would be about $60,200 before tax. After the 30 per cent tax offset and Medicare levy, that would leave roughly $58,900.
That explanation gets a bit technical, but here is the important point – there is a $19,200 difference in those two scenarios. Or, put another way, roughly 48 per cent more.
Importantly, this is a simplified illustration, not a forecast. But the point it illustrates is an important one. The aspiring first-home buyer ended up with a lot more by simply using the First Home Super Saver Scheme.
Not many Australians are using it
Despite these benefits, the majority of first home buyers are not using the First Home Super Saver Scheme.
The ATO recorded about 15,200 successful FHSS releases in 2024-25. That compares with around 116,565 owner-occupier first-home-buyer loan commitments recorded by the ABS in the same financial year.
On those numbers, around 13 per cent of first home buyers used the scheme.
The 2024-25 withdrawals was the biggest year on record for the FHSS. Since it launched in 2018, the average annual number of first home buyers withdrawing money under the scheme has been 9529.
The complexity is the challenge
I think the reason more Australians are not using the FHSS is the complexity.
When you make voluntary contributions through your super fund they show up just like any other contributions. You don’t earmark them as first home deposit contributions and they don’t sit in a separate account.
These contributions form part of your overall super balance until you’re ready to buy your first home. When you are preparing to buy, you request an FHSS determination through the ATO to find out how much you can release. Under the current rules, you can request a release before signing a contract or within 90 days afterwards. You generally have 12 months from your release request to sign a contract to buy or build a home, with an extension possible up to 24 months. You must tell the ATO within 90 days of signing.
I think that complexity loses a lot of Australians. If there was a separate bucket in your super fund titled “First Home Super Saver Scheme” that you could contribute to separately, it would be a lot more tangible. It would also be easier to know how much your deposit was growing. But just because the administration is confusing, doesn’t make it any less worthwhile.
In our earlier example, they had an extra $19,200 available for a deposit. If they were using the government’s 5 per cent deposit scheme, that’s an extra $384,000 in buying power.
This isn’t going to solve Australia’s housing crisis or make first home buyers feel like the odds aren’t stacked against them. But for someone with time to save, it could help the same money go further. Hopefully we’ll see more first home buyers take advantage of it.
For many Australians, owning their own home has never felt further away.
