First Home Saver Accounts 2025: Guide to Saving for Your First Home

With home ownership still a core part of the Australian dream, saving for that all-important first deposit remains a massive hurdle. The reintroduction and update of First Home Saver Accounts (FHSAs) in 2025 is making waves among first-time buyers. If you’re looking to take advantage of new tax breaks and supercharged savings rules, here’s what you need to know about the revamped FHSA scheme.

What is a First Home Saver Account and Why the Buzz in 2025?

The First Home Saver Account is a government-supported savings vehicle designed specifically for Australians aiming to buy their first home. Originally launched in 2008 and axed in 2014, the scheme has returned in 2025—this time with more flexible features and broader eligibility.

• Tax benefits: Earnings in an FHSA are taxed at a concessional rate of 15%, similar to superannuation, and withdrawals for a home deposit are tax-free.
• Government co-contribution: In 2025, the government matches 15% of annual personal contributions up to $5,000 (that’s a $750 yearly boost).
• Flexible access: Unlike super, you don’t have to wait until retirement—your FHSA funds can be used once you’re ready to buy a home.

With property prices still high in Sydney, Melbourne, and Brisbane, these perks can make a significant difference in how quickly you build your deposit.

How the 2025 FHSA Scheme Works: Rules, Limits, and Updates

The 2025 reboot addresses many of the criticisms of the earlier scheme. Here’s a breakdown of the key features:

• Who’s eligible? Australian residents aged 18–39 who have not previously owned property in Australia.
• Contribution cap: Up to $15,000 per year, with a lifetime cap of $60,000.
• Accessing your savings: You must contribute for at least two financial years before you can withdraw for a home deposit.
• Account flexibility: You can have multiple FHSAs (though total contributions must stay within the cap), and can transfer between providers without penalty.

2025 policy update: The government has increased the co-contribution rate and removed the mandatory employer contributions, making it easier for gig workers and self-employed Australians to participate. Additionally, FHSA balances are now excluded from Centrelink means testing, helping savers retain eligibility for certain government benefits while saving.

Real-World Example: Max’s First Home Journey

Consider Max, a 27-year-old barista in Melbourne who opens an FHSA in July 2025. He deposits $10,000 per year. Thanks to the 15% government co-contribution, he receives $1,500 annually from the government. Over four years, he accumulates $46,000—$40,000 from his contributions and $6,000 in government top-ups, plus tax-friendly interest.

When Max is ready to buy in 2029, he withdraws the full balance tax-free for his deposit—cutting years off his savings timeline compared to a regular savings account.

Tips to Make the Most of Your FHSA in 2025

• Start early: The sooner you open an account, the faster you’ll benefit from compounding returns and government co-contributions.
• Max out your annual contributions: Aim for the $15,000 yearly cap if possible to get the biggest government boost.
• Shop around: FHSA providers vary in fees and interest rates, so compare your options for the best deal.
• Coordinate with other schemes: Combine your FHSA savings with other support, like state-based first home buyer grants or stamp duty concessions, for maximum benefit.

The Bottom Line

The 2025 First Home Saver Account scheme is a game-changer for first-time buyers, offering meaningful tax breaks and government support to help Aussies step onto the property ladder. With new flexibility and bigger incentives, it’s well worth considering if you’re dreaming of your own place in the next few years.