With average residential house prices growing by over 250% since 2002,¹ saving a first home deposit has become a daunting task for many hard-working Aussies. But one little-known super scheme could offer a much-needed boost to your deposit savings efforts — the First Home Super Saver scheme.

What is the First home super saver scheme?

The Government introduced the First home super saver scheme in 2017-18 to help first home buyers to save money for a house deposit.

Under the scheme, you can make voluntary contributions of up to $15,000 per year into your super — up to a maximum of $50,000 over multiple years — which you can later withdraw to help buy your first house.

It’s important to note that you can only withdraw money you’ve voluntarily contributed to super, not contributions made by your employer. Similarly, spouse contributions and government co-contributions are also off-limits.

Over the years, the scheme has steadily grown in popularity, with around 9,500 first home buyers withdrawing a total of $141.7m for home deposits in 2021-222 — an average of just under $15,000 per person.

Benefits of the scheme

The key advantage of the First home super saver scheme is that you’ll likely pay much less tax on any money you save in super compared to a regular savings account.

Voluntary pre-tax contributions into super (including salary sacrifice) are taxed at only 15%. For many Australians, this will be significantly less than your marginal tax rate, which is between 19% - 45% for anyone earning more than $18,201 per year.

These tax savings boost your deposit, helping you save faster.

The money you put in super is also invested with the aim of earning investment returns. So, when you’re ready to withdraw your deposit, any investment earnings generated by your voluntary contributions come with it.

Overall, this means more bang for your deposit savings buck!

Limits of the scheme

The First home super saver scheme is designed to help Australians buy their first home, so there are rules about who can access it and what kind of property you can buy.

To be eligible for the scheme, you must be a first home buyer, buy the house in your name, and live in the house for at least six of the first twelve months after purchase.

You can only access money through the First home super saver scheme once, and the house you buy must be in Australia and can’t be a houseboat or motor home.

You can buy vacant land if you intend to build a home with money from your First home super saver scheme, though you must enter into a contract to construct the house within 12 months of purchasing the land.

To access the deposit you’ve saved in super, you need to ask the ATO for a determination (to find out how much you can withdraw) and then request a release. It can take up to 25 days to receive your money, so be sure to consider this when you start making offers.

For full details, see our First home super saver scheme fact sheet.

Get the right advice

The First home super saver scheme can provide a great leg-up to first home buyers. However, as with every major financial decision, it pays to get advice before going ahead.

If you’re saving for a house and are thinking about taking advantage of the scheme, be sure to get expert advice to make sure it suits your specific financial needs.

¹ First Home Buyers Report 2022, Finder

² Usage of the FHSS scheme, ATO

Information correct as at 1 November 2024