Freshly released data from the Canada Revenue Agency reveals just how much the typical saver was able to put into a first home savings account in the first year the account was on offer for Canadian home-buying hopefuls.
The FHSA, first announced in the Liberals’ 2022 federal budget, went live midway through 2023 at most financial institutions offering the savings vehicle.
The account allows holders to deposit up to $8,000 annually to a maximum of $40,000 over their lifetime. Contributions are tax-exempt on the way in and out of the account, as long as the withdrawals are put towards a qualifying home purchase. Funds can grow tax-free in the account for up to 15 years, at which point they must be withdrawn for a down payment or transferred to an RRSP.
Finance Minister Chrystia Freeland has touted the popularity of the account, with more than 750,000 Canadians having opened an FHSA as of April 16, when the Liberals tabled their latest spending plans.
The CRA tabled information in the House of Commons on Wednesday about the relative values of these accounts in response to a question from Conservative MP Dan Albas.
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The agency’s response includes data on the nearly 625,000 individuals with active FHSAs as of the end of 2023. Canadians can have multiple FHSAs at different institutions as long as they remain within the annual and lifetime contribution limits for the account.
According to the CRA, the fair market value of all active FHSAs was $2.37 billion.
The average balance of an FHSA at the end of last year was $3,792, while the median value was $2,040.
Roughly 272,000 Canadians had FHSA account balances between $5,001 and $10,000, the CRA data showed. Some 66,000 FHSA holders had balances of between $1,001 and $5,000.
While annual deposits into an FHSA are capped at $8,000, investments within the account could see balances rise past that mark.
As of the end of last year, nearly 1,000 individuals had FHSA values above $10,000; 50 account holders even surpassed balances of $20,000, according to the CRA.
FHSAs appear most popular among lower-income Canadians, CRA data shows.
Some 194,220 active FHSA shoulders had gross annual incomes of $53,359 or less, followed by 154,400 account holders with taxable income of between $53,360 and $106,717.
After that point, the prevalence of the account drops off steeply, with 25,210 active FHSA holders having incomes of $106,718-$165,430, and less than 10,000 people with higher incomes holding an account.
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