First Home Super Saver Scheme for migrants: eligibility and how it works

How the FHSS works

The FHSS allows eligible individuals to make voluntary contributions to their super fund, and then apply to withdraw those contributions (plus associated earnings) to put toward purchasing their first home in Australia (ATO).

The tax advantage comes from the different tax treatment of super contributions compared to regular savings. Voluntary concessional (pre-tax) contributions are taxed at 15% in the fund, rather than at your marginal income tax rate (which could be 32.5%, 37%, or 45%). When you withdraw the contributions under the FHSS, they are taxed at your marginal rate less a 30% offset — effectively a lower rate than if you had saved the same amount in a regular bank account.

The maximum amount that can be released under the FHSS is AUD 50,000 per person. Couples can each save AUD 50,000, potentially accumulating AUD 100,000 combined. Contributions are capped at AUD 15,000 per financial year and must fall within the overall concessional contributions cap of AUD 30,000 per year (which includes employer SG).

Only voluntary contributions count toward the FHSS — your employer's compulsory SG contributions cannot be withdrawn under the scheme.

Eligibility for migrants

The FHSS eligibility requirements are straightforward, and permanent residents meet most of them from the date of arrival.

You must be 18 years or older. You must have never owned property in Australia (including investment property, vacant land, commercial property, a company title interest, or a lease of land). You must not have previously released FHSS amounts. You must be an Australian citizen or permanent resident (or hold a temporary visa that permits you to purchase property — but temporary visa holders face FIRB restrictions that complicate the picture).

For new permanent residents who have never owned property in Australia, the main question is practical: do you have enough time to make contributions and build a meaningful balance before you want to buy? If you plan to buy within six months of arrival, the FHSS has limited value because you can only contribute AUD 15,000 per year. If you plan to buy in two to three years, you can build a more substantial FHSS balance.

Owning property overseas does not disqualify you from the FHSS. The eligibility test looks at whether you have owned property in Australia, not elsewhere.

How to make FHSS contributions

You can make FHSS contributions in two ways.

Voluntary concessional contributions can be made through salary sacrifice (your employer deducts an additional amount from your pre-tax salary and pays it into your super fund) or through personal contributions that you claim a tax deduction for on your tax return. These contributions are taxed at 15% in the fund.

Voluntary non-concessional (after-tax) contributions can also be made — these are contributions from your take-home pay that you do not claim a deduction for. These are not taxed on entry to the fund. The tax benefit on withdrawal is different from concessional contributions.

For most migrants, salary sacrifice is the simplest method. Arrange with your employer to contribute an additional amount per pay cycle above the SG. Keep track of your voluntary contributions each financial year to ensure you stay within the AUD 15,000 annual FHSS limit and the AUD 30,000 overall concessional cap.

How to withdraw for a home purchase

When you are ready to buy, you apply to the ATO for a FHSS determination — this tells you how much you are eligible to withdraw. You then apply for the release of FHSS amounts, and the ATO instructs your super fund to release the funds.

The process has specific timing requirements. You must apply for a FHSS determination before signing a contract to purchase a property. After receiving the determination, you request the release and must sign a contract to purchase or construct a home within 12 months (extendable by a further 12 months in certain circumstances).

The released funds are paid to you, and you must use them toward a home purchase. If you do not purchase a home within the required timeframe, you can either re-contribute the amount to super or pay FHSS tax on the released amount.

Practical considerations for new migrants

The FHSS requires a super fund that accepts voluntary contributions. When choosing your super fund as a new migrant (see the guide on choosing a super fund), ensure the fund you select accepts voluntary contributions and that the process for making them is straightforward.

The AUD 50,000 maximum may not seem like a large amount relative to property prices in Sydney or Melbourne, but the tax saving compared to regular savings can be meaningful. On AUD 50,000 in concessional contributions, the tax saving is approximately AUD 5,000–8,500 depending on your marginal tax rate.

Timing matters. If you arrive in July and plan to buy in two years, you can contribute AUD 15,000 in year one and AUD 15,000 in year two, releasing AUD 30,000 plus associated earnings under the FHSS. If you plan to buy in three to four years, you can reach the AUD 50,000 cap.

The FHSS is a deposit-building tool, not a complete home-buying strategy. It works best when combined with regular savings and potentially the First Home Owner Grant (available in some states for new homes) and stamp duty concessions for first home buyers.

Can temporary visa holders use the FHSS?

The FHSS eligibility criteria require that you intend to live in the property for at least six months within the first 12 months of ownership. Temporary visa holders can use the FHSS if they meet all eligibility criteria, but the FIRB restrictions on property purchases (particularly for established dwellings) and the requirement to sell when the visa expires add complexity. In practice, the FHSS is most useful for permanent residents.

Does owning property overseas disqualify me?

No. The FHSS eligibility test only considers whether you have owned property in Australia. Property ownership in other countries does not affect your eligibility.

Can my partner and I both use the FHSS for the same property?

Yes. Each person can release up to AUD 50,000 under the FHSS, so a couple purchasing together can potentially withdraw up to AUD 100,000 in total. Each person applies individually to the ATO.

What if I contribute to FHSS but decide not to buy?

You can choose to leave the contributions in super (they become part of your regular super balance and are subject to normal preservation rules) or withdraw them and pay FHSS tax. You do not lose the contributions — but you cannot access them outside of the FHSS or a condition of release.

Can I use FHSS to buy an investment property?

No. The FHSS requires that you live in the property as your home for at least six months within the first 12 months. It is specifically for first home buyers purchasing a residence, not an investment property.