In 2023, a complete of 484,320 tax filers reported contributing to an FHSA, with a median contribution of $8,000—the utmost allowed for the 12 months.
The biggest group of contributors have been youthful Canadians aged 25 to 34, who accounted for over 57% of all FHSA customers. Greater than 61% of contributors earned over $60,000, suggesting the product has to date resonated most with higher-earning youthful households seeking to enter the housing market.
The FHSA was launched as a hybrid tax-sheltered account, combining the tax-deductibility of RRSPs with the tax-free withdrawals of TFSAs, supplied funds are used to buy a primary residence.
Monetary writer David Chilton, greatest recognized for The Rich Barber, has called the FHSA “the best deal within the historical past of Canadian financial savings,” and urged potential first-time patrons to take full benefit of its distinctive twin tax advantages.
For an entire rundown on the FHSA, click here.
TFSA continues to outpace RRSPs
Whereas FHSA participation was promising for a brand new program, Tax-Free Financial savings Accounts (TFSAs) stay essentially the most extensively used financial savings automobile among the many three registered accounts.
In 2023:
- 7.5 million tax filers contributed to a TFSA.
- The median contribution was $6,500, matching the 2023 annual restrict.
- Half of TFSA contributors had incomes below $60,000, with almost two-thirds incomes below $80,000.
- TFSA utilization remained robust even amongst older Canadians—2.3 million individuals aged 65 and over made contributions.
In contrast, 6.3 million tax filers contributed to Registered Retirement Financial savings Plans (RRSPs), with a decrease median contribution of $3,420 for these contributing solely to an RRSP. That determine rose to $5,000 for these contributing to each an RRSP and TFSA.
RRSP contributors tended to skew older and better revenue:
- 54% had incomes over $80,000.
- The biggest share of contributions got here from these aged 45 to 64.
The info suggests a transparent divide in how completely different revenue and age teams use these financial savings instruments. TFSA contributions have been comparatively flat throughout revenue ranges (between $6,000 and $6,500), whereas RRSP contributions ranged extra extensively—from simply $1,060 amongst these incomes below $20,000, to $6,810 amongst these incomes $80,000 or extra.
| Characteristic | RRSP | TFSA | FHSA |
|---|---|---|---|
| Annual contribution restrict | 18% of revenue (max $31,560 in 2024) | $6,500 | $8,000 |
| Lifetime contribution restrict | No restrict | Cumulative since 2009: $88,000 | $40,000 |
| Tax-deductible contributions | ✔️ Sure | ❌ No | ✔️ Sure |
| Tax-free progress | ✔️ Sure | ✔️ Sure | ✔️ Sure |
| Tax-free withdrawals | ❌ No (until for HBP*) | ✔️ Sure | ✔️ Sure (if for first residence) |
| Withdrawal situations | Taxed until utilizing Residence Patrons’ Plan | Anytime, any purpose | Have to be for first residence buy |
| Finest fitted to | Retirement financial savings | Normal financial savings/investments | First-time homebuyers |
*HBP = Residence Patrons’ Plan permits as much as $35,000 RRSP withdrawal for first residence, repayable over 15 years.
Utilization patterns reveal generational and revenue divides
Amongst working-age Canadians (25 to 64), each RRSP and TFSA contribution medians tended to extend with age.
Nonetheless, older adults have been a lot much less more likely to contribute to RRSPs, with solely 434,000 contributors aged 65+, in comparison with 2.3 million TFSA contributors in that very same age group.
The FHSA, in contrast, was nearly totally pushed by youthful contributors, with negligible utilization amongst these aged 45 and up.
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Final modified: April 10, 2025