FHSA helps higher earners
A new study found Canada’s First Home Savings Account mainly benefits higher earners and those with family support rather than the most financially strapped first‑time buyers. (theglobeandmail.com) (fool.ca)
Canada’s First Home Savings Account is attracting people with enough income to save $8,000 a year, not the first-time buyers under the most financial strain. (statcan.gc.ca) Statistics Canada said 484,320 tax filers contributed to a First Home Savings Account in 2023, the program’s first year, and the median contribution was the full annual maximum of $8,000. Most contributors, 61.4 per cent, had income above $60,000, and 57.2 per cent were ages 25 to 34. (statcan.gc.ca) The account lets eligible first-time buyers deduct contributions from taxable income, grow investments tax-free and withdraw the money tax-free for a qualifying home purchase. The annual contribution limit is $8,000, the lifetime limit is $40,000, and the account can stay open for up to 15 years. (canada.ca; canada.ca) That tax break rises with income because deductions are worth more to people in higher tax brackets. In its 2023 launch example, the federal Finance Department said buyers earning between $70,000 and $100,000 would get $20.50 in federal tax savings for every $100 contributed. (canada.ca) The family-money gap is also widening in Canada’s housing market. Statistics Canada reported in March 2025 that 4 in 10 homeowners had benefited from an inheritance, a down-payment gift, a family loan or a property transfer when entering the market. (statcan.gc.ca) That same Statistics Canada report said homeowners who received inheritances got a median $85,100 in 2023, up from $67,000 in 2019, while renters received a median $29,800 in 2023, down from $33,000 in 2019. The agency said renters’ savings remained well below typical down-payment thresholds. (statcan.gc.ca) Ottawa has promoted the account as a core housing measure since it launched in August 2023. In November 2024, the Finance Department said nearly 1 million Canadians had opened one, calling it part of a broader plan to make homeownership more affordable. (canada.ca; canada.ca) The early data point to a program that works best for buyers who already have spare cash flow or family backing. Buyers who cannot set aside thousands of dollars a year still face the same down-payment hurdle, even with a tax-free account waiting for them. (statcan.gc.ca; statcan.gc.ca)
