First Home Super Saver Scheme in South Sydney: Your 2026 Guide
- 1 day ago
- 5 min read
The First Home Super Saver Scheme lets eligible first home buyers use their superannuation to help fund a deposit, and it can make a real difference for buyers targeting South Sydney's competitive market in 2026.
The scheme allows you to make voluntary contributions to your super (up to $15,000 per year, $50,000 total) then withdraw those contributions plus earnings when you're ready to buy, potentially saving thousands in tax compared to saving in a regular bank account. From affordable units in suburbs like Waterloo and Eastlakes to entry-level properties around Tempe, every dollar counts when building a South Sydney deposit.
My Finance Agent helps first home buyers across South Sydney navigate the scheme alongside their home loan options from more than 60 lenders.
Here's what you need to know about using the First Home Super Saver Scheme for your South Sydney property purchase.
How does the First Home Super Saver Scheme work?
The scheme lets you make voluntary super contributions specifically to save for a first home deposit, then withdraw those contributions plus earnings when you buy. You can contribute up to $15,000 per financial year and $50,000 in total across multiple years.
When you withdraw the money, you pay tax at your marginal rate minus 30 percentage points (with a minimum rate of zero). For most buyers this creates significant tax savings compared to saving the same amount in a standard savings account where you pay your full marginal tax rate on interest earned.
Who can use the First Home Super Saver Scheme in South Sydney?
You're eligible if you've never owned property in Australia before (either alone or with a partner) and you intend to live in the property you're buying for at least six months of the first four years you own it. The property must be in Australia but can be anywhere, including South Sydney.
Couples can both use the scheme, potentially accessing up to $100,000 combined ($50,000 each) plus earnings. This can significantly boost your deposit capacity, whether you're targeting a unit in Zetland or Mascot or looking at terraces in suburbs like Newtown.
What types of super contributions count?
Only voluntary contributions you make from 1 July 2017 onwards count towards the scheme. This includes both concessional (before-tax) and non-concessional (after-tax) contributions you choose to make above your employer's compulsory super guarantee.
Salary sacrifice contributions: Voluntary before-tax contributions arranged with your employer count towards the scheme and reduce your taxable income immediately.
Personal deductible contributions: Voluntary contributions you make directly to your super fund that you claim as a tax deduction also count.
After-tax contributions: Non-concessional contributions from your after-tax income count but don't provide an immediate tax deduction.
Ready to explore how the scheme fits your South Sydney buying plans? We compare home loans from 60+ lenders to find the right fit for your situation. Free service, no obligation. Book a free chat or call (02) 8313-8400
How do you apply to withdraw money from the scheme?
You apply through the Australian Taxation Office, not your super fund. The process involves several steps that need to be completed in order.
Step 1: Talk to us about your home loan pre-approval
Before applying to withdraw scheme funds, get pre-approved for your first home buyer loan. This confirms exactly how much you can borrow and helps you target properties within your budget.
Step 2: Request a determination from the ATO
Apply online through your myGov account for a First Home Super Saver Determination. The ATO will calculate how much you can withdraw based on your eligible contributions plus earnings.
Step 3: Contact your super fund
Once you receive your determination, contact your super fund to request the release. They'll verify the details with the ATO and process the payment, usually within a few business days.
Step 4: Use the funds for your purchase
The money must be used within 12 months of receiving your first determination. If you don't use it for a property purchase within this timeframe, you'll need to return it to super or pay additional tax.
What are the tax implications?
The tax treatment depends on whether your original contributions were made before or after tax. For concessional (before-tax) contributions and their earnings, you pay tax at your marginal rate minus 30 percentage points when you withdraw them.
For non-concessional (after-tax) contributions, only the earnings component is taxed on withdrawal. The contributions themselves aren't taxed again since you already paid tax on that income before contributing it to super.
How does a mortgage broker in South Sydney help with scheme planning?
A broker helps you coordinate the scheme with your overall home loan strategy to maximise your buying power. We work with you to time your pre-approval, scheme withdrawal and property purchase so everything aligns smoothly.
Loan structuring: We help determine the optimal deposit size when combining scheme funds with other savings, including how this affects your loan-to-value ratio and whether you'll need lenders mortgage insurance.
Timing coordination: We coordinate your pre-approval timing with your scheme application so you're ready to act when you find the right South Sydney property.
Lender selection: Different lenders have varying policies on deposit sources and first home buyer benefits, which we navigate to find the best fit for your situation.
Ready to find out which lenders suit your South Sydney plans? We compare loans from 60+ lenders from our Alexandria office. Free service, no cost for standard home loans. Get in touch or call (02) 8313-8400
Frequently Asked Questions
Can I use the scheme to buy an apartment in South Sydney?
Yes, the scheme can be used for any residential property type in Australia, including apartments. Whether you're buying in a high-density area like Zetland or a mixed suburb like Marrickville, the scheme funds can form part of your deposit.
What happens if I don't use the withdrawn money to buy a property?
You must use the funds within 12 months of your first determination. If you don't purchase a property, you can either return the money to super (paying the release authority tax) or keep it and pay additional tax at your marginal rate plus an extra charge.
Can I combine the scheme with other first home buyer benefits?
Yes, you can use scheme funds alongside other programs like the Australian Government 5% Deposit Scheme and NSW First Home Buyer Assistance Scheme, subject to each program's individual eligibility requirements and income limits.
How much can a couple save using the scheme?
Each eligible person can contribute up to $50,000, so couples can potentially access up to $100,000 combined plus earnings. For a couple in the 32.5% tax bracket, this could represent significant tax savings compared to saving the same amount in regular accounts.
Do I need to be working to make contributions?
You need taxable income to make concessional contributions and claim tax deductions. However, you can make non-concessional contributions from any source of after-tax money, including savings, gifts, or other income sources.
Should I salary sacrifice or make personal contributions?
Both count towards the scheme, but salary sacrifice is often simpler as your employer handles the contributions automatically. Personal deductible contributions require you to lodge a notice of intent to claim a deduction with your super fund and include the deduction in your tax return.
Your Next Steps
The First Home Super Saver Scheme can provide valuable tax savings for South Sydney first home buyers, but it works best when coordinated with your overall home loan strategy. The timing between making contributions, applying for withdrawal, and securing pre-approval all need to align for the smoothest purchase process.
Ready to explore how the scheme fits with your South Sydney home loan options? Contact us for a free consultation or call (02) 8313-8400. The My Finance Agent team will help you coordinate your super savings with the right lender from our panel of 60+ options.
Written by the My Finance Agent team, award-winning finance and mortgage brokers with offices in Alexandria (South Sydney) and Bathurst, NSW (FBAA Finance Broker of the Year, NSW & ACT, 2023 and 2024).
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