Can I use my super to buy a house?

Using the First Home Super Saver scheme to buy a house

Under the First Home Super Saver Scheme, first home buyers can access up to $15,000 in voluntary super contributions per year, up to a total of $50,000 across several years.

How does it work?

Basically you make extra super contributions and then withdraw them for the purpose of buying your first home.

You pay 15% tax on super contributions, compared to the more than 30% most people pay on their salary income.

And you also earn money as the contributions are invested in your super fund. When you withdraw these contributions, plus the earnings, you're taxed at your normal income tax rate, minus a 30% FHSS offset.

But the main thing to understand with the FHSSS is that you can't withdraw your compulsory super contributions.

Our expert says

"Politicians often float the policy idea of allowing people to withdraw money from their super to put towards a house deposit. This might sound really appealing, but there are downsides to taking money from your super early. The money you take out would be worth a lot more by the time you retire if it stays invested in the super system. Superannuation is designed for the sole purpose of funding your lifestyle when you retire, which is why there are such strict rules around accessing it early. It's for your own benefit!"

Alison Banney

Editorial Manager, Money

Buying a home through an SMSF

You can buy an investment property through your SMSF, but you can’t use your super balance to buy a home you're going to live in.

This is because superannuation is designed to fund your retirement, not to help you fund the essential purchases you make throughout your life.

The purchase of an investment property is allowed because it gives you the potential to earn rental income and take advantage of a capital gain when you sell the property, increasing your retirement savings.

Can you access super before you retire?

There are strict rules in place to prevent Australians from accessing their superannuation balance before they retire. These rules are designed to ensure that Australians have enough money to enjoy a comfortable lifestyle once they stop working.

To access your super before your retirement you'll need to satisfy a condition of release. Some common examples that might allow you to access your super early are if you suffer a serious illness or disability, or if you are experiencing extreme financial hardship (including receiving Commonwealth income support payments).

Using super for a deposit on a house is not a condition of release.

Using your super to buy a house when you retire

Once you reach 60 you can access the money in your super. There's nothing stopping you from using your super to buy a house at this point. And after 60 you won't have to pay tax on the money you withdraw (in most cases).

• You can access your super as a lump sum. This is probably helpful if you're planning to buy a property outright.
• You can set up a transition to retirement (TTR) pension. This option is designed to allow Australians who have reached their preservation age to keep working while also accessing some of their super benefits. You can withdraw between 4% and 10% of your pension account balance each year.

If you don't want to buy a property outright using your super funds or other money, remember that it's harder to get a a home loan in your 60s. A lender will want to see an exit strategy (a plan to pay off the loan). And you may need to talk to a mortgage broker.

Want to find out more about super? Check out our super funds guide

If you can't use your super to get a house deposit, what are your options?

If none of the options above work for you here are some other tips you can put into practice:

• Look for other ways to save a deposit yourself. Check out our complete guide to deposit savings for more information.
• Guarantor loan. If your parents own their own property and are willing to help out they could guarantee a portion of your deposit. It's not without risks but it's a great option for some buyers.
• The first home loan deposit scheme. This new scheme involves the government guaranteeing 15% of your deposit, helping you avoid lenders mortgage insurance costs.

Written by

Richard Whitten

Money Editor

Richard Whitten is Finder’s Money Editor, with over seven years of experience in home loans, property and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Graduate Certificate in Communications from Deakin University. See full bio

Richard's expertise

Richard has written 593 Finder guides across topics including:

• Home loans
• Property
• Personal finance
• Money-saving tips