First Home Super Saver: How Do You Build a Deposit at 15% Tax?
Save for a home inside super, where the tax is lower
Saving a house deposit in a bank account means saving with money that has already been taxed at up to 47%. The First Home Super Saver (FHSS) scheme flips that: you save inside super, where contributions are taxed at just 15%, then pull the money out for your first home.
Why This Matters
The maths is worth a look. A worker in the 32% bracket who salary sacrifices $15,000 keeps about $12,750 of it working inside super, versus roughly $10,200 if they took it as pay and banked it. Across the scheme's $50,000 limit, that difference can add many thousands to a deposit for doing nothing except changing where the savings sit. Deemed earnings are then added on top when you withdraw.
Who It Applies To
First home buyers aged 18 or over who have never owned property in Australia. Employees can salary sacrifice; sole traders can make personal deductible contributions. Couples can each use the scheme, effectively doubling the limits for a household.
Key Rules for the 2026-27 Income Year
- Voluntary contributions only. You can withdraw voluntary contributions (salary sacrifice, personal deductible or after-tax top-ups) but not your employer's compulsory super.
- $15,000 a year, $50,000 in total. Those are the per-person limits on contributions that count toward an FHSS withdrawal.
- Earnings come out too. Your withdrawal includes deemed earnings on the contributions, calculated at a set ATO rate.
- Withdrawal is taxed lightly. Amounts from before-tax contributions are taxed at your marginal rate minus a 30% offset, usually very little.
- Get the determination first. Request an FHSS determination from the ATO before you sign a contract to buy. Order matters.
Wondering how this fits your own numbers? OzLedger can model an FHSS savings plan for you before 30 June, so you contribute the right amount and withdraw at the right time.
Common Mistakes to Avoid
- Signing before applying. Sign a purchase contract before requesting your determination and you can lose access to the scheme.
- Counting employer super. Compulsory contributions can't be withdrawn; only voluntary ones count.
- Cutting the timing fine. Allow several weeks for the ATO to release the money, and factor that into settlement dates.
- Forgetting the caps interact. FHSS contributions still count toward your normal contribution caps.
A Practical Example
Sophie, 28, earns $85,000 and salary-sacrifices $12,500 a year for four years, $50,000 in total. Because those dollars were taxed at 15% instead of about 32%, roughly $8,000 more lands in her deposit fund compared with saving from her take-home pay. She requests her FHSS determination, is released about $45,000 after withdrawal tax, and puts it toward her first apartment. Her partner does the same, giving them close to $90,000 between them.
Save inside super, where contributions are taxed at just 15%, then pull the money out for your first home.
Key Takeaways
Save at 15% tax
Contributions are taxed at 15% inside super, not your marginal rate of up to 47%.
Know the limits
$15,000 a year and $50,000 in total, per person.
Determination before contract
Request your FHSS determination from the ATO before you sign to buy. The order is critical.
Couples double up
Two people, two limits, one deposit, effectively doubling the household benefit.
Frequently Asked Questions
Typically $2,000 to $3,000 for each $15,000 contributed at middle incomes, compared with saving the same pay in a bank account, before deemed earnings are added.
Yes. Each partner has their own $50,000 limit and can withdraw toward the same first home, effectively doubling the household benefit.
The money stays in super for retirement. You can also keep it there deliberately; there is no penalty for not withdrawing.
Yes. Personal deductible contributions count as voluntary contributions, so sole traders get the same benefit as salary sacrificers.
Amounts from before-tax contributions are taxed at your marginal rate with a 30% offset applied. For most first home buyers that means only a small slice of the withdrawal goes to tax.
Ready to keep more of what you earn?
OzLedger prepares personalised 2026-27 tax plans for employees and sole traders, and can model an FHSS savings plan for you before 30 June. Visit ozledger.com.au.
This article is general information only and does not take into account your personal circumstances. It is not tax, legal or financial advice. Tax laws and thresholds change, and the figures here are based on ATO guidance current at the time of writing. Before acting, speak with a registered tax agent. The OzLedger team is always happy to help.