FHSS Release Tax and Timing Explained (Australia 2025-26)
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Primary tax-year context: 2025-26
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General information only. Speak with a registered tax agent for advice.
Many first-home buyers understand the contribution side of the First Home Super Saver (FHSS) scheme, but get tripped up on the release side.
The ATO position is straightforward: when you request an FHSS release, part of the amount becomes assessable in your tax return, tax is withheld before payment, and the timing rules around signing a contract matter.
What can you actually withdraw?
The ATO says your FHSS maximum release amount can include:
- 100% of eligible non-concessional voluntary contributions
- 85% of eligible concessional contributions
- associated earnings
The current FHSS release framework works with:
- up to $15,000 of eligible contributions from any one financial year
- up to $50,000 across all years in total
Why only 85% of concessional contributions counts
This is the key tax mechanic.
Concessional contributions are generally taxed at 15% inside super. That is why the ATO release calculation only counts 85% of eligible concessional contributions. Non-concessional contributions are counted at 100%.
When is the FHSS amount taxed?
The ATO says your payment summary will show an assessable FHSS released amount and any tax withheld.
You include that assessable amount in your tax return for the financial year in which you requested the release, which may be different from the year you physically receive the money.
That timing point matters. A buyer who requests release in June but receives funds later still needs to deal with the assessable FHSS amount in the earlier tax year.
How the withholding works
Before the ATO sends the released amount to you, it withholds tax.
ATO guidance says the withholding is generally based on:
- your expected marginal tax rate, including Medicare levy, less a 30% tax offset, or
- 17% if the ATO cannot estimate your expected marginal rate
At year end, the actual tax outcome is reconciled through your tax return using the assessable FHSS amount, tax withheld, and the 30% FHSS tax offset.
Contract timing rules
The FHSS timing rules are easy to miss.
According to the ATO, you can make a release request:
- before signing a property contract, or
- within a limited period after signing
The current ATO guidance says:
- if your FHSS determination was made on or after 15 September 2024, you should make the release request within 90 days of signing the contract
- if your FHSS determination was made on or before 14 September 2024, the period is 14 days
If you make a valid release request after signing but outside the relevant timeframe, the ATO says you can be subject to FHSS tax.
How long does the money take?
The ATO says it may take around 15 to 20 business days for the money to move from your super fund, through the ATO, and then to you.
That means FHSS is not a last-minute settlement tactic. If you wait until the contract is already unconditional and the deposit or settlement timeline is tight, you can create avoidable pressure.
Practical checklist
- Confirm your FHSS determination before signing if possible
- Check whether your determination date puts you on the 90-day rule or the older 14-day rule
- Plan around the 15 to 20 business day release window
- Keep the payment summary for the year you request release
- Remember the assessable FHSS amount goes into the tax return for the request year
Sources (verified)
Run this before you sign or request release
If the risk is “I know FHSS is useful, but I may mistime the release or overestimate what lands in my bank account”, test the numbers before the property timeline locks in.
- Use the FHSS Calculator to estimate eligible contributions, likely release value, and the contribution-side tax benefit.
- Use the FHSS vs Bank Savings scenario if you are still deciding whether FHSS actually beats keeping the deposit outside super.