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That’s the first year the FHSA, designed to provide a tax-free and tax-deductible vehicle toward an eventual first home purchase, was introduced. 

These numbers are not surprising, said Ian Calvert, vice-president and principal, wealth planning, at Highview Financial Group.

But it is “encouraging” that so many people are taking advantage of this relatively new product. 

“What’s attractive about this account is that it takes the best pieces of a tax-free savings account (TFSA) and a Registered Retirement Savings Plan (RRSP)”Ìý°ä²¹±ô±¹±ð°ù³ÙÌý²õ²¹¾±»å.

About 480,000 people who filed taxes in 2023 reported making a contribution to an FHSA, at a median of $8,000, the maximum annual amount.

Most of these individuals had an income over $60,000 (about 61 per cent) and were between the ages of 25 and 34 (57 per cent).

It makes sense that younger people are the ones most interested in the account, Calvert added, because they have 15 years, or until they turn 71, to use the money for a first home purchase.

But even if they eventually don’t end up buying a home, they’re not “trapped in this account.” They can transfer the funds to an RRSP, Calvert said.

“If plan A doesn’t work out there’s a really good plan B,” he added.

Individuals can put up to $40,000 total in a FHSA.

Not only is the money you earn on the FHSA (through interest, mutual funds, etc.) tax free, you can also claim the contributions as deductions on your taxes. 

The only downside would be if someone needed the funds back in a hurry, in which case they’d get taxed on the withdrawal, Calvert added.

The Statistics Canada data released Tuesday also found more people contributed to a TFSA than an RRSP in 2023. 

About 11.3 million people contributed to one of these vehicles — 3.8 million contributed only to an RRSP, five million only to a TFSA, and 2.5 million contributed to both.

Thuy (Twee) Lam, a certified financial planner and money coach at Objective Financial Partners, called the FHSA an “amazing tool” for savings that can be used in combination with these products.

It is “100 per cent more flexible” than the Home Buyer’s Program (HBP), which allows you to withdraw RRSP funds toward the purchase of a first home, as you don’t need to pay the money back, she said. 

There’s no limit on the withdrawal, she said. If your $40,000 turned into $100,000 over the years through good investments you could take out the entire amount, unlike the HBP, which is capped at $60,000.

But you only start amassing contribution room which is why Lam encourages clients to open one “ASAP.”