Can I Use My Super to Buy a House? Find Out Now

The first home super saver scheme (FHSS) explained

The FHSS scheme is the government's primary way for first-time buyers to use their super for a house deposit. It's not about taking all your super, but rather using the superannuation system's tax advantages to save faster.

• How it works: You make voluntary contributions, either pre-tax (concessional) or after-tax (non-concessional), to your super fund. These voluntary amounts, plus associated earnings, can later be released to fund your first home deposit.

• Key limits: You can contribute up to $15,000 per financial year and a maximum of $50,000 of eligible contributions in total across all years.

• Withdrawal amount: When you request a release from the ATO, the funds are subject to specific tax rates, but you can typically access 100% of non-concessional and 85% of concessional contributions.

• Eligibility: You must be 18 or over, have never owned property in Australia and intend to live in the home for at least six months of the first 12 months you own it. This is a powerful, tax-effective strategy to accelerate your saving speed.

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Accessing your super at preservation age

The simplest and most flexible way to use your super for a house is by waiting until you reach your preservation age (currently 55 to 60, depending on your birth date) and meet a condition of release, such as retirement.

• Post-retirement access: Once you've legally accessed your super, you can withdraw funds as a lump sum or income stream and use that money for any purpose, including buying a house or paying off an existing mortgage.

• Full control: This method gives you full control over your funds, unlike other schemes, with no restrictions on living in the property.

• No restrictions on type of home: You can buy a primary residence, an investment property or use the funds to downsize, the choice is entirely yours.

• Planning is crucial: Deciding to access and use your retirement savings early requires careful financial planning to ensure your long-term security. An independent mortgage broker from a platform like HeyNest can connect you with an expert to model this impact alongside your mortgage options.

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Buying property with a self-managed super fund (SMSF)

If you have a self-managed super fund (SMSF), you can use it to buy property, but only under very strict rules and specific conditions. This is a complex strategy often suited for experienced investors.

• Investment only: The property purchased must be purely for investment purposes; you, or any related parties, cannot live in or rent the property. This is a mandatory requirement under the "sole purpose test" for all SMSFs.

• Limited recourse borrowing: If the SMSF needs to borrow funds, it must do so via a Limited Recourse Borrowing Arrangement (LRBA), which is highly regulated and complex.

• Compliance is non-negotiable: SMSF rules are rigid. Violating them can result in severe penalties, fines and the loss of the fund's tax concessions.

• Expert advice needed: Due to the complexity and high compliance costs, it is essential to seek advice from a licensed financial advisor and an SMSF specialist before pursuing this path. HeyNest brokers often work with these specialists to ensure you're on the right track before committing to a home loan.

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Frequently asked questions

Can I use my super to buy a house before retirement?

Generally no, unless you qualify for the first home super saver scheme (FHSS) or use a self-managed super fund (SMSF) to buy an investment property.

Is the FHSS scheme a loan?

No, it's a government initiative that lets you make and then withdraw specific voluntary super contributions for your first home deposit.

Can my SMSF buy the home I currently live in?

No, SMSF rules strictly prohibit a fund member or their relatives from living in a property owned by the SMSF.