This is something for your children and grandchildren.

With property prices remaining a challenge for many Australians, most first home buyers spend years trying to save a deposit. 

What many people don't realise is that there may be a tax-effective way to boost those savings using something they already have: their superannuation. 

The First Home Super Saver Scheme (FHSSS) allows eligible first home buyers to make voluntary contributions to super and later withdraw those contributions (plus associated earnings) to help purchase their first home. The idea is simple: by saving through super, some people may be able to accumulate a deposit more efficiently than if they saved solely through a regular bank account.  

How does it work? 

Under the scheme, eligible voluntary contributions can be made to your super through: 

• Salary sacrifice contributions 

• Personal deductible contributions 

• Voluntary after-tax contributions 

Currently, up to $15,000 of eligible contributions per financial year can count towards the scheme, with a lifetime maximum of $50,000 per person. 

For couples buying together, both individuals may be able to use their own FHSSS limits if they're eligible, potentially providing a meaningful boost to their combined deposit savings.  

Why do some first home buyers use it? 

• Potential tax savings 

Voluntary concessional contributions are generally taxed at 15% inside super, which may be lower than your marginal tax rate. This can leave more money available to help build your deposit. 

• A structured approach to saving 

Some people find they're less tempted to dip into money once it's been contributed to super, helping them stay disciplined with their savings goals.  

• Potentially faster deposit accumulation 

Between the tax benefits and deemed earnings applied by the ATO, deposit savings may grow more quickly than they would in a standard savings account. Flexible contribution methods 

The strategy can be implemented through salary sacrifice or personal contributions, depending on your circumstances and cash flow. 

• Can work alongside other first-home buyer incentives 

The scheme operates separately to many state-based grants and concessions, subject to eligibility. 

But there are some things to consider 

•  Strict eligibility rules apply 

The scheme isn't available to everyone and is generally designed for genuine first home buyers who meet the eligibility requirements. 

•  Timing matters 

There are important administrative requirements and release requests need to be managed carefully before ownership of the property transfers. 

• Not all super contributions count 

Regular employer Super Guarantee contributions cannot be withdrawn under the scheme. Only eligible voluntary contributions count. 

•  Contribution caps still apply 

Contributions made under the FHSSS continue to count towards normal super contribution caps, so careful planning is important. 

•  Your money is less accessible while it's in super 

Unlike money sitting in a savings account, funds inside super generally can't be accessed until they're released through the FHSSS process. 

•  Withdrawing money from super may affect long-term retirement savings 

Any amount used for a home deposit is no longer invested for retirement, which may reduce future retirement benefits. 

Am I eligible? 

While everyone's circumstances are different, some of the key requirements generally include: 

• You must be at least 18 years old. 

• You must generally not have previously owned property in Australia. 

• The property must be located in Australia. 

• You must intend to live in the property. 

• The scheme can generally only be used once. 

• Only eligible voluntary contributions can be counted. 

• You must apply for an FHSS determination before requesting a release of funds, and timing is important before settlement. 

Is it worth considering? 

The First Home Super Saver Scheme won't be suitable for everyone, but for eligible first home buyers with stable income, surplus cash flow and time to build up contributions, it can be an effective way to put super to work for two major financial goals: saving for a home and building long-term wealth. 

If you're planning to buy your first home in the next few years, speak with us about whether the FHSSS may be appropriate for your circumstances.