The First Home Super Saver scheme (FHSS): how it works

Who can use it

• You're 18 or older when you ask for the release (you can contribute before then).
• You've never owned property in Australia: a home, investment property, vacant land or commercial property. If you lost property through financial hardship, you can ask the ATO for an exception.
• You haven't used the scheme before.
• You plan to live in the home for at least six of the first 12 months after it's practical to move in.
• Couples can each use the scheme towards the same home.

What counts

• Voluntary contributions made from 1 July 2017: salary sacrifice, and personal contributions from your bank account (whether or not you claim a deduction for them).
• Up to $15,000 of contributions from any one financial year, and $50,000 in total, plus an earnings amount the ATO works out (not your fund's actual returns).
• Not counted: your employer's compulsory super, contributions from your spouse, and government co-contributions.
• These contributions still count towards your normal super caps.

The steps, in order

1. Make your voluntary contributions, and keep a record of them.
2. Claiming a deduction for personal contributions? Your fund must acknowledge your notice before step 4. See our article on claiming a deduction for your own super contributions.
3. Ask the ATO for an FHSS determination in ATO online services (through myGov). It shows how much you can release.
4. Ask the ATO to release the money. You can do this before signing a contract, or up to 90 days after, but it must be before you own the property.
5. Tell the ATO within 90 days of signing a contract to buy or build.
6. If you don't sign a contract within 12 months of the release (the ATO can extend this by up to 12 months), you can put the money back into super, or pay FHSS tax of 20% on it.

The release can take several weeks, as it goes from your fund to the ATO and then to you, so don't count on it arriving before your deposit is due.

How it's taxed

• Amounts from before-tax contributions (salary sacrifice, or personal contributions you claimed a deduction for), plus the earnings amount, are added to your taxable income in the year they're released.
• You then get a 30% tax offset on that amount.
• Amounts from after-tax contributions you didn't claim a deduction for come back tax-free.
• The ATO withholds tax from the release, and the final figure is worked out in your tax return. Tell us if you received an FHSS release during the year.

How we can help

We can explain how the tax rules apply to you, check that any deduction notice is done before your release, and include your FHSS release correctly in your tax return. We can't tell you whether the scheme is the right way for you to save for a home. For that, talk to a licensed financial adviser.