How FHSSS Works
You make voluntary contributions to your super fund (salary sacrifice or personal deductible contributions). When you're ready to buy your first home, you apply to the ATO to withdraw those contributions plus deemed earnings. Because the money was taxed at 15% going in (instead of your marginal rate), you've effectively saved faster.
The Rules
| Rule | Detail |
|---|---|
| Maximum per year | $15,000 |
| Maximum total | $50,000 |
| Eligible contributions | Voluntary concessional and non-concessional from 1 July 2017 |
| Deemed earnings | Shortfall interest charge rate (currently ~4-5%) |
| Who can apply | First home buyers who've never owned property in Australia |
| Must sign contract within | 12 months of requesting determination (extendable by 12 months) |
Tax on Withdrawal
Concessional contributions are taxed at your marginal rate minus a 30% offset when withdrawn. Non-concessional contributions come out tax-free. In practice, most people use concessional (salary sacrifice) contributions for the bigger tax benefit going in.
Example
You earn $80,000 and salary sacrifice $15,000/year into super for FHSSS over 3 years:
- Contributed: $45,000
- Tax paid going in: $6,750 (15% contributions tax)
- If you'd saved outside super: $13,500 tax (30% marginal rate)
- Tax saving: ~$6,750 plus deemed earnings on the balance
Frequently Asked Questions
Can I use FHSSS if I've owned property overseas?
Yes. The scheme only looks at whether you've owned property in Australia. Foreign property ownership doesn't disqualify you.
What if I don't buy a home?
You can recontribute the amount back into super, or leave it in your bank account (but you'll pay tax on it). You can also extend the 12-month purchase window.
Can a couple both use FHSSS?
Yes. Each person can withdraw up to $50,000. A couple can access up to $100,000 combined for the same property purchase.
Does this affect my super guarantee or contribution cap?
Yes. FHSSS contributions count toward your concessional or non-concessional cap. Make sure your total contributions (including employer SG) don't exceed the cap.