How it works
The first home super saver (FHSS) scheme allows eligible first home buyers to withdraw their eligible voluntary super contributions – along with deemed earnings – to put towards a house deposit.
You can withdraw eligible voluntary contributions under the Scheme once only, and you can’t withdraw the super that your employer is obliged to pay or any spouse contributions – only the extra voluntary contributions you’ve made from 1 July 2017.
You can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year included in your eligible contributions to be released under the FHSS scheme, up to a total of $50,000 contributions across all years. You will also receive an amount of deemed earnings that relate to those contributions.
The Scheme is administered by the Australian Taxation Office (ATO) but you pay your contributions into your TelstraSuper account.
For many people, saving for a first home through super may help to grow the deposit more quickly.
To be eligible to withdraw contributions under the FHSS scheme, you must:
- be 18 years or older;
- have not previously held interest in property (subject to certain exceptions);
- have not previously accessed the Scheme.
To see a full list of eligibility criteria, visit the ATO website.
How to save for your home deposit in super
You can start saving by telling your employer that you’d like to start making voluntary contributions from your pre-tax salary. You can also make voluntary post-tax super contributions into your super. Please note, the annual contribution caps still apply.
Let’s consider a case study.
Lily wants to buy a 2-bedroom unit as her first home. To fast track her savings she begins contributing $12,500 (in addition to her employer mandated super contributions) a year into her super from her pre-tax salary. This type of contribution gets taxed at 15%, so each year $1,875 is deducted as contributions tax by her super fund and $10,625 goes towards her savings in super.
After four years, Lily decides to go for it and purchase her first home. She withdraws her first home savings which includes contributions of $42,500, investment earnings over 4 years. Using her super she has managed to save $43,087*.
If she had used a savings account outside of super, Lily’s $12,500 would have been taxed the marginal rate of 34.5% leaving her with $8,188 per year. After four years outside of super she would have saved $34,071*.
Over four years, Lily has managed to save an additional $9,016, by taking advantage of the tax savings from within super. If Lily pooled her savings with her partner, they would have a combined deposit of $86,174 including $18,030 in tax savings!
*Assumptions: Based on a salary of $70,000, with $12,500 ($10,625 after contributions tax) saved each year for four years. Deemed earnings rate of 4% with 30% rebate on the withdrawal from super. Non Super Savings assume a yearly saving, an earnings rate of 4% p.a. and interest taxed at marginal tax rates. Partner earns and contributes the same amount as Lily. This example is for illustrative purposes only and is not intended to provide a forecast or guarantee on outcome. Note: The 2023/24 pre-tax contributions cap is $27,500 for all individuals.
How to contribute
- Pre-tax (concessional) contributions - you can contribute by cheque or BPAY and completing this form, or via salary sacrifice by speaking to your payroll department.
- Post-tax (non-concessional) contributions – you can make regular or one-off contributions via BPAY or by sending a cheque with this form.
Finding out how much you can withdraw
You can check your balance with TelstraSuper at any time to see how much you have saved.
When you are ready to receive your FHSS amounts, you need to apply for an FHSS determination and a release from the ATO. When you apply for an FHSS determination they will tell you your maximum FHSS release amount.
To start saving for your deposit, all you have to do is make additional contributions (for example by making a salary sacrifice before-tax contribution) into your super each year, within the annual contribution limits. See the table below for more details.
|Before tax contribution limits||Maximum per year you can use for your deposit||Total amount you can save for your house deposit|
|2023/24||$27,500||$15,000||Up to $50,000|
Important to note:
- You can only make one withdrawal for your deposit under the scheme.
- Remember that your employer’s compulsory contributions also count towards the concessional(before-tax) contributions limit, but they cannot be withdrawn as part of the scheme.
- For full eligibility criteria, visit the ATO website.
Tax on FHSS release amount
- Part or all of the FHSS released amount may be included in your assessable income.
- The ATO will withhold tax from the FHSS release amount before paying it to you.
- The ATO will provide a payment summary detailing the assessable FHSS released amount.
- You need to include the assessable FHSS released amount in your tax return for the financial year in which you requested the release.
- The tax liability on this assessable amount will be reduced by a 30% tax offset.
- The withheld tax will help meet your tax liability for the year.
Using your deposit
Once your savings have been released, you have up to 12 months from the date you requested the release of FHSS amounts to sign a contract to purchase or construct a home. You can only make one withdrawal of your eligible contributions in your lifetime up to the maximum withdrawal amount of $50,000.
If you don’t buy a home in this period you may be able to extend for a further 12 months.
If you do not enter into a contract to purchase or construct a home during this period, you can either:
- recontribute the amount into your super fund. This amount must be a non-concessional contribution and be at least equal to your assessable FHSS released amount, less any tax withheld, or
- you can keep the released amount and be subject to FHSS tax. This is a flat tax equal to 20% of your assessable FHSS released amounts.
Notifying the ATO
If you sign a contract to purchase or construct your home you must notify the ATO within 28 days of signing the contract.
If you recontribute the assessable FHSS amount (less tax withheld) into your super fund, you must notify the ATO within 12 months of the date you request the release of your FHSS money.
If you don't notify the ATO that you have done one of the above or you choose to keep the FHSS amount, you may be subject to the FHSS tax.
What should you do?
If you’re thinking of making a contribution, you may like to talk to TelstraSuper Financial Planning on 1300 877 800 for simple advice over the phone that’s provided at no additional cost as part of your TelstraSuper membership.
You can also read more about the scheme on the ATO website.