The First Home Super Saver scheme (FHSS) lets you build a home deposit inside super, then withdraw it when you buy. If you are also paying off a car loan, or thinking about one, the two plans interact more than most people expect. Your take-home pay, the timing of the release and your home loan borrowing power all come into it. This guide explains how the FHSS works in 2026 and what it means for anyone juggling a car loan alongside a first home goal.
Quick answer: the FHSS lets eligible first home buyers make voluntary super contributions of up to $15,000 a financial year, and $50,000 in total, then release them with deemed earnings to put towards a home. The money cannot be used for a car. A car loan does not stop you using the scheme, but its repayments count against you when a lender works out how much you can borrow for the home.
How the First Home Super Saver scheme works
According to the ATO's overview of the scheme, you put extra money into super as personal voluntary contributions and later withdraw it as part of your deposit. Because super is taxed differently from wages, the savings can grow faster. Voluntary concessional (before-tax) contributions are taxed at 15% in the fund, which is usually less than your marginal rate, and the assessable part of what is released attracts a 30% FHSS tax offset.
When you are ready to buy, the ATO says you can withdraw:
- 100% of eligible personal voluntary contributions you have not claimed a tax deduction for
- 85% of eligible personal contributions you have claimed a deduction for
- 85% of eligible salary sacrifice contributions
- an amount of associated earnings, which the ATO calculates at the shortfall interest charge rate rather than your fund's actual return
The ATO's release amounts page works through an example. Jill salary sacrifices $1,500 a month and ends up with $50,000 of eligible concessional contributions. Her maximum release is $47,690: 85% of the $50,000 ($42,500) plus $5,190 of associated earnings.
Who can use it
The ATO eligibility page sets out the conditions. You must be 18 or older when you request a determination, you must never have owned property in Australia (including an investment property, vacant land or commercial property) unless the ATO finds you have suffered FHSS financial hardship, your name must be on the title of the home you buy, and you must not already have a completed release request. Eligibility is individual, so a couple can each use their own contributions towards the same home.
You also need to live in the property. The ATO says you must intend to occupy it as soon as practicable and live there for at least 6 of the first 12 months. The scheme cannot be used to buy vacant land on its own, a houseboat or a motor home.
Which contributions count
Only voluntary contributions made from 1 July 2017 count. The ATO's contributions page lists what is excluded, and the big one for employees is the super guarantee: the compulsory contributions your employer makes cannot be withdrawn under the FHSS. Neither can spouse contributions, government co-contributions or amounts above the contribution caps. FHSS money is not held in a separate account. If your plans change, it simply stays in super until you meet another condition of release, such as retirement.
Why the money cannot go towards a car
Super can only be accessed early in limited cases, and the FHSS is tied to buying or building a home you will live in. There is no route to use released FHSS money on a vehicle. We cover the wider early access rules in can you use your super to buy a car. If you are released FHSS money but do not sign a contract for a home within the allowed time, the ATO says you must either put the assessable amount (less tax withheld) back into super, or keep it and pay FHSS tax, a flat 20% of the assessable released amount.
Salary sacrifice, take-home pay and car loan serviceability
The most common way to save under the FHSS is salary sacrifice. That lowers your take-home pay, and take-home pay is what a lender looks at when it checks whether you can afford new repayments. Your payslip will show the salary sacrifice amount, so ask your broker how a lender will treat it before you apply.
There is a second, less obvious effect for anyone with a study loan. The ATO notes that salary sacrifice contributions are reportable employer super contributions, which are included in repayment income for HELP and other study loans. If you have a HELP debt, read our guide to how HECS-HELP affects car loan borrowing power as well.
Timing: determination, release and contract
The scheme runs in steps, and the order matters. According to the ATO's release steps:
- Request a determination first. You must do this before ownership of any property transfers to you, which generally happens at settlement.
- Request the release. You can only submit one release request, so include the full amount. If you have already signed a contract, the release request should be made within 90 days of signing (for determinations made on or after 15 September 2024).
- Allow 15 to 20 business days. The ATO says it usually takes this long for your fund to release the money and for the ATO to pay it to you.
- Sign a contract and tell the ATO. You generally have 12 months from your release request to sign a contract to buy or build, and the ATO may extend this by a further 12 months. You must notify the ATO within 90 days of signing.
Before paying you, the ATO withholds tax at your expected marginal rate (including Medicare levy) minus the 30% offset, or 17% if it cannot estimate your rate. It also offsets the payment against any debt you owe the ATO or another Commonwealth agency, which can reduce it, possibly to nil. So the cash that reaches your bank account can be smaller than your determination.
How a car loan affects your home loan borrowing power
The FHSS boosts your deposit, but it does nothing for the other side of the home loan assessment, which is serviceability. A home lender will count your car loan repayments as a commitment, and the larger they are, the less it may be willing to lend. We explain this in more detail in how car repayments affect what you can borrow for a home and property prices and borrowing power.
A few practical points follow from that:
- If you need a car before you buy a home, a smaller loan or a shorter list of extras keeps the monthly repayment down. Our car loan repayment guide shows what drives the figure.
- Taking on a new car loan in the months before a home loan application adds a fresh commitment just as the home lender is looking at your accounts.
- Compare total cost, not only the headline rate. The car loan rates page shows advertised rates alongside comparison rates, and our calculators let you test different loan amounts and terms.
Tax time and other payments
You include the assessable FHSS released amount and the tax withheld in your tax return for the year you requested the release, even if the money arrives after 30 June. The ATO then works out your actual marginal rate and applies the 30% offset. If you are lodging soon, our note on the 31 October 2026 tax return deadline covers how your tax return and notice of assessment can shape a car loan application.
The ATO also confirms that the assessable FHSS released amount is not counted as assessable income for family assistance or child support.
Where the FHSS fits with the rest of your super
The FHSS uses voluntary contributions only, so it sits on top of the super your employer already pays. For the bigger picture, see our superannuation guide for borrowers and the explainer on catch-up super contributions. When you are ready to look at vehicle finance, you can compare options on our car loans page or browse lender profiles.
This article is general information about how the scheme works. It does not take your circumstances into account. The ATO suggests considering independent financial advice before using the FHSS, and its guide to whether the scheme is right for you is a good place to start.
