Buying your first home can feel out of reach, especially with rising property prices in and around Penrith. The First Home Super Saver (FHSS) Scheme is designed to help you save for your first property faster by using the tax advantages of your superannuation fund.
At MLS Financial in Penrith, we work with first home buyers to understand whether the FHSS Scheme could help them step into their first home sooner — and how it fits into their broader financial plan.
The below information is either factual, or general advice, and as such you will need to consider these within your own personal situation and goals, and whether this is right for you.
What is the First Home Super Saver Scheme?
The FHSS Scheme allows eligible Australians to make voluntary contributions to their super fund, then withdraw those contributions (plus associated earnings) to use as part of their first home deposit. Because superannuation enjoys favourable tax treatment depending on your income, this strategy can help you grow your deposit more quickly than saving in a regular bank account.
How it Works
1. Make voluntary contributions
- You can make before-tax (concessional) contributions, such as salary sacrifice or personal deductible contributions. These can reduce your taxable income in the year you make them.
- You can also make after-tax (non-concessional) contributions from your take-home pay. These contributions do not reduce your taxable income, however you aren’t taxed with contributions tax in super.
2. Withdraw for your home purchase
- You can apply to release up to $15,000 of eligible contributions from a single financial year, with a total limit of $50,000 across all years. This figures are up to date in FY25/26.
- The released amount will also include associated earnings calculated by the ATO.
3. Use the funds towards your deposit
- Funds must go towards purchasing or building your first home in Australia.
- You’ll need to live in the property for at least six of the first 12 months after it’s practical to move in.
Eligibility Criteria
You may be eligible if:
- You are 18 or older.
- You have never owned property in Australia (including investment properties, vacant land, or commercial property).
- You haven’t previously requested an FHSS release from the ATO.
- Your name must be on the title of the property you purchase.
- You apply for a release before signing a property contract, or within 90 days of signing the property contract.
The Potential Benefits
- Tax savings — Concessional contributions are taxed at 15% in super, which may be lower than your marginal tax rate.
- Faster growth — The combination of lower tax and potential investment earnings inside super can help your savings grow quicker than in a standard savings account.
- Disciplined saving — Money in super is not easily accessible, which can help you stay on track with your savings goal.
Important Considerations
The FHSS Scheme can be an excellent strategy, but it isn’t right for everyone. You’ll need to consider:
- Your cash flow and ability to make voluntary contributions.
- Investment returns inside your super fund.
- Your contribution type and whether there is tax benefit in your situation.
- The tax on withdrawal including the 30% tax offset.
- The amount of financial risk you are taking and whether this can impact on your FHSS funds.
- How long it may take to build up your deposit.
- Potential changes to superannuation or property rules in the future.
- Ensuring that you will be purchasing your first home to live in. If it is an investment, you won’t be able to access the FHSS funds, and they can be locked until you meet a condition of release.
It’s also important to get the timing right — you must apply to the ATO for release before signing a property contract.
An Example
Let’s say your income is $85,000 per year, and you decide to salary sacrifice $10,000 into super for your first home deposit:
- In a regular bank account, you’d first pay your marginal tax rate (30% plus Medicare Levy), leaving around $6,800 to save.
- Under the FHSS Scheme, the $10,000 is taxed at 15% in super, leaving $8,500 invested — potentially earning returns until withdrawal.
Over a couple of years, the difference can add up to thousands of extra dollars towards your deposit.
How We Can Help
At MLS Financial, we help first home buyers in Penrith and beyond:
- Understand the FHSS Scheme in plain English.
- Compare the potential tax and savings benefits for your situation.
- Integrate your home deposit goal into your broader financial plan.
- Liaise with your accountant and super fund to ensure contributions and withdrawals are processed correctly.
Final Thoughts
The First Home Super Saver Scheme can be a smart way to fast-track your first home deposit, especially if you’re disciplined with your savings and want to take advantage of the tax benefits of superannuation. However, as with all financial strategies, the best approach depends on your individual goals, income, and timeframe.
If you’re considering the FHSS Scheme or want to explore all your options for buying your first home, contact MLS Financial today. We’ll help you navigate the rules, maximise your savings, and take the next step towards owning your own home.
📞 Call MLS Financial on 1300 791 800
📩 Or get in touch online to book a no-obligation chat.
Disclaimer:
This information is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider speaking to a qualified financial planner before making any financial decisions. MLS Financial and Infocus Securities Australia Pty Ltd do not accept responsibility for actions taken based on this content.