First Home Super Saver (FHSS)

The First Home Super Saver (FHSS) scheme is an Australian government initiative designed to help first-home buyers save for a home deposit faster by leveraging the tax advantages of the superannuation system. It allows you to make voluntary concessional (before-tax) or non-concessional (after-tax) contributions into your super fund, and then withdraw them (plus deemed earnings) to buy a home.

Under the FHSS scheme, you can save up to $15,000 per financial year, up to a lifetime cap of $50,000. When you withdraw the funds, they are taxed at your marginal rate minus a 30% tax offset. This tax structure allows buyers to accumulate a deposit much faster than they would by saving in a standard bank account.

Real-World Example If Mark salary-sacrifices $10,000 of his pre-tax income into super, he only pays 15% tax ($1,500) inside the fund, leaving $8,500. If he had taken it as salary, he would have been taxed at 32.5% plus Medicare levy ($3,450), leaving only $6,550. By saving through super under FHSS, Mark gains an extra $1,950 toward his deposit in a single year.