Last updated: July 2026
Using Super to Buy Your First Home in Australia 2026
Yes, you can use super to help buy your first home, but only through the First Home Super Saver Scheme (FHSS). You cannot simply withdraw your existing super balance or your employer's super guarantee contributions. The FHSS lets you make voluntary contributions into super, benefit from lower tax rates, and then release those specific contributions (plus deemed earnings) for a home deposit.
Can You Use Super to Buy a Home?
This is one of the most common questions from first home buyers, and the answer has an important nuance. You can use super to buy a home, but only through the FHSS. The scheme was introduced specifically to let first home buyers take advantage of the lower tax rate inside super (15% compared to marginal rates of up to 47%) to build a deposit faster.
Crucially, the FHSS only applies to voluntary contributions you make on top of your employer's compulsory super guarantee. Your existing super balance, your employer's contributions, and the investment returns earned inside your fund are not accessible under the FHSS. You are essentially using your super fund as a tax-advantaged savings vehicle for a deposit, not raiding your retirement savings.
How the FHSS Works
The mechanics of the FHSS are straightforward. You make voluntary contributions into your super fund, up to $15,000 per financial year and $50,000 in total. These contributions are taxed at just 15% inside super. When you are ready to buy, you apply to the ATO to release 85% of your concessional contributions (plus 100% of any non-concessional contributions) along with deemed earnings.
- Contribution cap: $15,000 per financial year, $50,000 lifetime maximum per person
- Tax in super: 15% on concessional contributions (vs your marginal rate outside super)
- Release amount: 85% of concessional, 100% of non-concessional, plus deemed earnings at the shortfall interest charge rate
- Tax on release: Assessable amount included in your income with a 30% tax offset. Effective rate is approximately 2% for buyers in the 30% bracket.
Use the FHSS calculator to see your estimated release amount
What Counts and What Does Not
This is where many people get confused. Not everything that goes into your super fund is eligible for the FHSS.
Eligible for FHSS
- Salary sacrifice contributions (pre-tax)
- Personal deductible contributions (you contribute directly and claim a tax deduction)
- Voluntary non-concessional contributions (after-tax, no deduction claimed)
NOT Eligible for FHSS
- Employer super guarantee (currently 12%)
- Investment earnings within your super fund
- Your existing super balance from prior years
- Spouse contributions or government co-contributions
The Tax Benefit Explained
Here is a worked example showing the tax advantage in concrete terms.
Example: $90,000 income, $15,000/year for 3 years ($45,000 total)
| Marginal tax rate (incl. Medicare levy) | 32% |
| Tax on $45,000 outside super | $14,400 |
| Tax on $45,000 inside super (15%) | $6,750 |
| Tax saving from salary sacrifice | $7,650 |
| Amount released (85% of $45,000 + deemed earnings) | ~$38,250 + earnings |
| Effective tax on release (30% offset, ~2% net) | ~$765 |
The net benefit: approximately $7,650 in tax savings, minus the small amount payable on release (~$765), plus deemed earnings credited to your balance. The total tax advantage is roughly $6,885 over three years, on top of having the disciplined savings locked away in super.
The tax advantage increases with income. At $150,000 (39% marginal rate including Medicare levy), the saving rises to 24 cents per dollar. At $200,000 (47%), it reaches 32 cents per dollar.
The Release Process
Releasing your FHSS funds involves a specific sequence of steps through the ATO. Getting the order right is important.
Request a determination from the ATO
Log in to your myGov account linked to the ATO and request an FHSS determination. This confirms the maximum amount you are eligible to release. You must do this before settlement (ownership transfer).
Request the release
Once you have your determination, submit a release request through myGov. The ATO will send instructions to your super fund to transfer the eligible amount.
Wait for funds to arrive (15-20 business days)
Your super fund processes the ATO's request and transfers the money to the ATO, which then pays it to you. The typical timeframe is 15 to 20 business days, though it can vary by super fund.
Sign a contract within 12 months
After the release, you have 12 months to sign a contract to purchase or build your first home. The clock starts from the date the funds are released.
If you do not buy: extension or penalty tax
If you cannot find a property within 12 months, request a 12-month extension (the ATO generally grants these automatically). If you still do not purchase, you can re-contribute the funds into super or keep them and pay a flat 20% tax on the assessable portion.
Couples Can Double the Benefit
Each person has their own independent FHSS entitlement. There is no shared cap or joint limit. If you are buying with a partner, each of you can contribute up to $50,000 into your own super fund and request a separate release.
Individual
- Max contributions: $50,000
- Release: ~$42,500 + deemed earnings
- Tax saving (at 32%): ~$8,500
Couple (combined)
- Max contributions: $100,000
- Release: ~$85,000 + deemed earnings
- Tax saving (both at 32%): ~$17,000
Both partners must independently meet all FHSS eligibility requirements. Both must be first home buyers, and both must be named on the property title. One partner's release does not affect the other's entitlement.
For a deeper look at optimising your salary sacrifice strategy over multiple years, see our FHSS salary sacrifice strategy guide. To see how the FHSS stacks with other schemes, see stacking government schemes.
See which schemes you qualify for
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Frequently Asked Questions
Can I withdraw my existing super balance to buy a home?
No. You cannot withdraw your existing super balance or employer super guarantee contributions to buy a home. The only way to use super for a home deposit is through the First Home Super Saver Scheme (FHSS), which only applies to voluntary contributions you have specifically made for this purpose.
How long does the FHSS release take?
After you request a release through the ATO, they instruct your super fund to transfer the funds. This process typically takes 15 to 20 business days. You should factor this timeline into your property purchase plans, as you need the funds available before settlement.
What happens to the money if I change my mind about buying?
If you do not sign a contract within 12 months of the release, the ATO may automatically grant a 12-month extension. If you still do not purchase, you can re-contribute the released amount into super (as a non-concessional contribution) or keep it outside super and pay a flat 20% tax on the assessable portion.
Does using the FHSS affect my super balance at retirement?
Yes. The amount released is withdrawn from your super fund. However, for most first home buyers, the tax savings and the ability to enter the property market earlier typically outweigh the impact on retirement savings, especially given the compounding growth of property equity over time. Seek personal financial advice for your specific situation.
Sources:
ATO: First Home Super Saver Scheme | ATO: Super contributions caps | ATO: Tax rates for Australian residents
Disclaimer: This information is general in nature and does not constitute financial, legal, or tax advice. Calculations are estimates only and may not reflect your exact circumstances. Eligibility criteria and dollar amounts may change without notice. Always verify with the relevant government authority, your mortgage broker, or a licensed financial adviser before making decisions.