Author: NikkiATO(Community Moderator)Community Moderator 22 May 2026
Hi @user1410,
The FHSS scheme offers a tax advantaged way for first homebuyers to save for a deposit for their first home. If you make concessional contributions, or non- concessional contributions for which you claimed deductions, those contributions are taxed at 15% which is often lower than the individual’s marginal tax rate. Those concessional contributions will reduce the tax liability in the annual return. The FHSS assessable released amount that goes in the tax return will get the additional benefit of the tax offsets.
Please see example 12 (Alex) in our Guidance notes GN 2024/01 which provides a practical example that covers the questions you have.
When you fill in your FHSS Release Request, we will nominate a withholding rate. This is calculated based on either:
- the marginal tax rate of your most recent previous tax return, plus Medicare levy, less 30%, or
- 17% (if we are unable to estimate your expected marginal rate).
If you believe this is too small (or too high) based on your current circumstances, you have the option to vary that withholding rate - this is done before you submit the FHSS Release Request. The withholding rate only applies to the concessional contributions (pre-tax) and the associated earnings (the assessable released component). It does not apply non concessional (post-tax) contributions. We’ll withhold tax based on the rate you nominated when your FHSS funds are released.
You will receive the FHSS amount less the withheld tax. Please note that this is a prepayment, not extra tax.
When it comes to the Income Tax Return, the FHSS assessable released amount will need to be included in your tax return (in the supplement income section) as assessable income, in the financial year you requested the release. You will also need to include the FHSS withheld amount.
At the end of the financial year, we will send you a FHSS Payment summary. This contains details about the FHSS assessable released amount and tax withheld amount, which you will need to include in your tax return.
Tax is worked out on your total taxable income (including the FHSS released amount). You receive a 30% tax offset on the FHSS amount, which reduces the tax payable on that portion of your income:
- The FHSS assessable released amount is added to your income.
- Tax is calculated at your marginal rate.
- The 30% offset reduces the tax on that amount.
- The withheld tax is credited (along with your PAYG withheld amount).
This means the final result (refund or amount owing) depends on your total income and tax already paid.
Have a read through the first home super saver scheme info on our website – specifically, step 3: signings a contract for a home and notifying us. It provides advice on next steps after you’ve requested the release amount.
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