Buying Property with Super – Harness Your Super Payments to Buy a Home

Since 1991 all Australian employees have enjoyed the protection of a compulsory superannuation system.

While super was primarily designed to provide people with a retirement nest egg, it also provides first home buyers with the opportunity to access limited funds to help purchase a home.

First introduced by the Federal government in 2018, the First Home Buyer Super Saver (FHSS) scheme has been further extended to help first home buyers get into the market.

In essence, the scheme allows people to make voluntary contributions to their superannuation fund which can then be accessed to buy an apartment or a residential house.

Writing in Forbes magazine, journalist Penny Prior says that the scheme offers a tax-effective way for first home buyers to generate additional funds towards a deposit for a property.

“Government estimated that by using the plan, first home savers could potentially boost their savings by at least 30% compared to a standard deposit account,” she said. [1]

The FHSS scheme is one several government assistance packages available to first home buyers – to learn more download ALAND’s information brochure here.

How the scheme works

Under the FHSS scheme, Australian home buyers are permitted to release a maximum of $15,000 in voluntary contributions in a single financial year towards the purchase of property.

The total contributions allowable across several years is $50,000 – an increase of $20,000 from the previous scheme.

Applicants can only make one request at a time under the scheme. Processing time is upto 20 business days, so anyone using these fund needs to factor in this waiting period.

But the Australian Tax Office is at pains to emphasise that the scheme only applies to voluntary contributions – super contributions made by your employer cannot be released. [2]

The nuts and bolts

  • Superannuation guarantee contributions made by your employer, and spouse contributions cannot be released.
  • You must receive a FHSS determination before signing a property contract or applying for release of FHSS funds
  • Correctly enter each of your eligible contributions for every year into the form. Do not total the contributions
  • If you there is an error in your FHSS determination, you can request another determination from the ATO
  • If there is incorrect information in your determination, your request may be delayed or cancelled
  • Limits apply to the eligible contributions that count towards your maximum releasable amount
  • You can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year and up to a total of $50,000 contributions across all year
  • You will also receive a deemed amount of associated earnings that relate to the above contributions – this is not the actual investment earnings on those contributions.

Are you eligible for the FHSS scheme?

To access the FHSS scheme, you must satisfy the following conditions:

  • You must be 18 years old or older when requesting a FHSS determination or a release of money
  • You’re a first home buyer who has never owned property in Australia, including vacant land or commercial property
  • You must occupy the unit for 6 months within the first 12 months after you take possession of the property
  • You have not previously made a FHSS release request.

Eligibility is assessed on an individual basis. This means that couples, siblings and friends can each access their own eligible FHSS contributions to purchase the same property.

You may still be eligible, even if you have previously owned property in Australia, if the Australian Tax Office determines you have suffered a financial hardship that resulted in a loss of ownership of all property interests. [3]

Penny Pryor from Forbes says that the scheme offers many advantages, such as favourable tax treatment and a flexible mechanism to help buyers boost their home deposits.

“[In addition], the FHSS scheme can be used by two people,” she said. “Which means a couple can combine their saved amounts for a deposit.” [4]


[1] Forbes
[2] Australian Tax Office
[3] Australian Tax Office
[4] Forbes