First Home Super Saver Scheme: using super for a Queensland deposit

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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Superannuation is the one large pool of savings most people under 35 have, and it is the one they cannot touch. The First Home Super Saver scheme is the narrow exception. It does not open up a person's existing super balance. It lets a future first home buyer put extra money into super, where it is taxed lightly, and take that extra money out again, with a calculated amount of earnings, to help buy a first home.

The scheme is federal, run by the Australian Taxation Office, and it works the same way in Queensland as anywhere else. What is local is how it sits beside the State's own help for first buyers and how far the sums go against Queensland prices. This guide follows the ATO's First Home Super Saver pages as updated on 7 and 8 July 2026. It covers who can use the scheme, which contributions count, how much can be released, how the tax works, the order of the steps, and what happens when a purchase does not go ahead.

Australian Taxation Office, First Home Super Saver scheme pages, updated 8 July 2026.

What the scheme does and does not do

The ATO describes the scheme as a way to use some eligible voluntary super contributions to help buy a first home. Three words in that sentence carry the weight.

"Voluntary" means contributions a person chooses to make, over and above what an employer must pay. The compulsory super guarantee paid by an employer never counts, and neither does anything already in the account from earlier years of work.

"Eligible" means made on or after 1 July 2017 and within the scheme's limits.

"Some" means the release is capped. The most that can be counted is $15,000 of contributions from any one financial year and $50,000 of contributions in total.

The benefit is a tax one. Money that goes into super before tax is taxed at 15 per cent on the way in, instead of at the saver's marginal income tax rate. When it comes out under the scheme it is taxed at the marginal rate less a 30 per cent offset. For most wage earners the result is a deposit that grows faster than the same pre-tax dollars saved in a bank account. The worked example further down puts numbers on that.

Who can use it

The ATO's eligibility page sets a short list of conditions. A person must be 18 or older when they request a FHSS determination, the first step toward a release. They must be a first home buyer who has never owned property in Australia. The ATO spells out how wide "property" is here: it includes an investment property, vacant land, commercial property, a lease of land and a company title interest in land. Someone who once owned a block of land or a share of an investment unit is not a first home buyer for this purpose, even if they have never owned a home to live in.

A person must also not have used the scheme before. The page excludes anyone who already has a completed release request.

Two points widen the field. The ATO says a person does not need to be an Australian citizen or an Australian resident for tax purposes to use the scheme, which sets it apart from most first-buyer assistance. And there is a hardship provision: previous ownership may not rule a person out if the ATO determines that they have suffered what it calls FHSS financial hardship and lost the property as a result.

The scheme works person by person. The caps, the contributions and the release all belong to one individual and one super account holder, and the ATO requires that the person's name be on the title of the home that is bought. It notes pointedly that being listed on the utility bills but not on the title is not ownership. Two people buying together are each assessed on their own contributions and their own history.

Which contributions count

A saver can build an eligible amount in two ways, and the ATO treats them differently at release.

Concessional contributions are made from before-tax income. They include amounts salary sacrificed through an employer and personal contributions for which the saver claims, or intends to claim, a tax deduction. Non-concessional contributions are made from after-tax money, with no deduction claimed.

The ATO's list of exclusions runs longer than the table. It also leaves out contributions to defined benefit interests and constitutionally protected funds, employer or member contributions required under an award or industrial agreement, amounts received through a contributions-splitting arrangement, and any contributions that exceed the ordinary legislated contributions caps. That last point matters for higher earners: the scheme does not create extra room in super. Voluntary contributions still sit inside the normal annual caps along with the employer's payments.

The rule about family is worth stating plainly, because it is where good intentions go wrong. A parent who pays money directly into an adult child's super fund has not made an eligible contribution. The contribution has to be the saver's own.

There is a side effect for anyone with a study loan. The ATO notes that salary sacrificed contributions are reportable employer super contributions, which are counted in the repayment income used for HELP and other study and training support loans. Salary sacrificing does not lower those compulsory repayments. On the way out, the news is better: amounts withdrawn under the scheme are not part of repayment income in the year of the withdrawal.

How much can come out

The maximum release has three parts: 100 per cent of eligible non-concessional contributions, 85 per cent of eligible concessional contributions, and associated earnings on both.

The 85 per cent reflects the 15 per cent tax a super fund pays on concessional contributions when they arrive. The money released is what was left after that tax.

The ATO gives its own examples. In one, a saver named Mary salary sacrifices $25,000 in a single year. Only $15,000 of it is eligible, because of the annual limit, and 85 per cent of that, $12,750, can be released. In another, Jill reaches the overall limit entirely through concessional contributions. Her maximum release is $47,690, made up of $42,500 in contributions, which is 85 per cent of $50,000, and $5,190 of associated earnings.

Two ordering rules decide which contributions are counted when a person has made more than the limits allow. Contributions are counted first in, first out: those made in an earlier financial year come before those made in a later one. And where concessional and non-concessional contributions are made at the same time, the ATO takes the non-concessional ones to be made first, which works in the saver's favour because they are released in full.

Reaching the $50,000 total takes at least four financial years at $15,000 a year: three years gets to $45,000 and the fourth supplies the last $5,000.

The earnings are deemed, not real

The "associated earnings" in a release are not what the super fund actually earned. The ATO calculates a notional amount using the shortfall interest charge rate, a rate it publishes each quarter and applies on a daily compounding basis. The rate is a base rate, tied to the 90-day bank accepted bill rate, plus an uplift of 3 percentage points.

The consequence is unusual. The amount a saver can withdraw does not depend on how their fund's investments performed. In a year when markets fall, the deemed earnings are still added to the release, and the difference comes out of the rest of the account. In a strong year, any return above the deemed rate stays in super for retirement. With the rate at 7.43 per cent for the September quarter of 2026, up from 6.61 per cent three quarters earlier, the deemed earnings have been rising with interest rates generally.

The tax arithmetic, with an example

Tax applies at three points. Going in, concessional contributions are taxed at 15 per cent inside the fund. Coming out, the ATO withholds tax from the release. Then, at tax time, the assessable part of the release goes into the saver's income tax return and is taxed at their marginal rate, with a 30 per cent FHSS tax offset applied against it. The tax withheld at release is credited in that assessment. Released non-concessional contributions are not taxed again, having come from after-tax money.

A worked example shows the size of the gain. The figures are illustrative. Assume a wage earner whose marginal tax rate, including the Medicare levy, is 32 per cent, and who can spare $15,000 of pre-tax salary a year for three years. Deemed earnings are left out to keep the comparison simple.

On these assumptions the scheme leaves the saver $6,885 further ahead after three years. The gap is wider for someone on a higher marginal rate and narrower for someone on a lower one. For a saver whose marginal rate is below 30 per cent, the offset more than covers the tax on release, and the advantage comes down to the difference between their own rate and the 15 per cent contributions tax.

The ATO adds two cautions. The assessable amount increases the saver's taxable income in the year of release, which can affect other things calculated from taxable income, though the ATO says it is not included in the income used for family assistance and child support. And a release can be offset against any outstanding debt to the ATO or another Commonwealth agency, reduced, even to zero, or delayed while that is worked out.

The release, step by step

The ATO sets the withdrawal out in five steps. The first is the one that cannot be done late.

The determination is the ATO's statement of how much the saver can take out. The saver then requests a release, the super fund sends the money to the ATO, not to the saver, and the ATO pays it on after withholding tax. The ATO sends a payment summary showing the total released, the assessable amount and the tax withheld.

The release is not instant, because it passes from the fund to the ATO and then to the saver, and the ATO publishes the expected timeframes with each step. A buyer relying on the money for a deposit or for settlement needs it in hand by the date the contract requires, so the practical order in Queensland is to obtain the determination before house hunting in earnest, and to tell the conveyancer or solicitor at the outset that part of the funds will arrive through the ATO.

What can be bought, and living in it

The money must go toward residential premises in Australia that the saver will live in. The ATO lists what does not qualify: non-residential premises, houseboats, motor homes and vacant land. Building is allowed. A saver can use the scheme for a contract to construct a home on vacant land, provided ownership of the land had not transferred before the determination was requested and the contract is entered into within 12 months of requesting the release.

Occupancy is part of the bargain. The ATO requires that the saver genuinely intends to occupy the property as a home as soon as practicable, and that they occupy it for at least 6 of the first 12 months from when it is practicable to move in. The scheme is for a home to live in, and an investment purchase does not qualify, though the rule leaves room for a buyer who later moves for work.

If the purchase does not happen

Plans fall over. A saver who has had money released and then does not buy has two choices under the ATO's rules: enter a contract to purchase or construct residential premises in Australia after all, or put the required amount back into super as a recontribution. Either way the ATO must be notified within its timeframes.

A saver who does neither pays FHSS tax, which the ATO calculates as 20 per cent of the assessable FHSS released amount. Its example is a saver named George, who released $26,100, of which $20,100 was assessable. The ATO withheld $1,809 and paid him $24,291. Having neither bought nor recontributed, George owed FHSS tax of $4,020, which is 20 per cent of $20,100. The ATO issues a notice of assessment showing the amount and its due date.

The money that is never released is not lost. It stays in the super account and is treated like any other super from then on, which means it is locked away until retirement. That is the real risk of the scheme for someone unsure about buying: voluntary contributions made with a home in mind cannot be taken out for a car, a wedding or a move overseas.

Where it fits beside Queensland's own help

The ATO says the scheme operates independently of state and territory concessions, and suggests checking with the relevant authorities about eligibility. In Queensland that means the Queensland Revenue Office for the First Home Owner Grant and the first home transfer duty concessions, each of which has its own tests of prior ownership, price and occupancy. The definitions do not match one another, so qualifying under one is not proof of qualifying under another.

The sums fit the deposits now asked of first buyers. The Australian Government's 5% Deposit Scheme accepts a 5 per cent deposit on homes up to $1,000,000 in Brisbane, the Gold Coast and the Sunshine Coast and up to $700,000 in the rest of Queensland, according to the First Home Buyers website. Five per cent of a $700,000 home is $35,000, which is less than the $37,485 in the worked example above. The Queensland Government's Boost to Buy shared equity scheme asks for a minimum deposit of 2 per cent, which Queensland Treasury requires to come from the buyer's actual savings.

A released amount will not, on its own, cover the other costs of buying, and for most first buyers it supplements ordinary savings instead of replacing them. Where it earns its place is at the margin: for a renter on a middle income, the tax saved over three or four years can be the difference between a deposit that meets a lender's minimum and one that falls short.

What to weigh before starting

The scheme rewards people who are fairly sure they will buy, who have several years to save, and who pay tax at a rate comfortably above 15 per cent. It does less for someone on a low marginal rate, and it carries a real cost for someone who may not buy at all.

The questions worth settling first are practical. Does the super fund accept the contributions and support releases under the scheme? Not every type of fund does: contributions to defined benefit interests are excluded. Will salary sacrifice reduce any employer contributions or other entitlements that are calculated on salary? Is there a study loan whose repayments will be unaffected by the sacrifice? Is there any history of property ownership, even a part share of vacant land, that would fail the first home buyer test?

The ATO states plainly that the scheme is not right for everybody. Its pages include a section for people deciding whether to use it, and the determination, which comes before any release request, shows the figure the ATO has calculated. The decision turns on personal tax and super circumstances, which is the territory of a registered tax agent or a licensed financial adviser.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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