More than 70% of Canadians do not believe the First Home Savings Account (FHSA), which was put forth in the federal budget earlier this month, will do much to help them become homeowners, a new survey says.

Hardbacon, a personal finance app, administered the survey and determined that 88.6% of respondents want to become homeowners, among whom 70% want to use the FHSA, which allows Canadians aged 18-40 to save up to $40,000, tax-free, towards a down payment.

However, 72% of prospective homeowners believe the FHSA will, at best, have little positive impact on their abilities to afford their first homes. Moreover, 82.7% of respondents who do not own a home, but intend to, aren’t expecting help from their parents in the form of gifts or loans.

Among the 30% who stated they don’t intend to use the FHSA, 54% said they don’t understand how the tax-free savings tool could help them become homeowners, while the remaining 46% don’t have enough money to contribute.

Survey results also revealed that 32.8% of respondents who plan on putting money into an FHSA next year will shrink their outlays wherever they can, and that 16.8% of respondents will reduce their RRSP contributions, while 12.8% will cut their TFSA deposits. Additionally, 9.6% of survey respondents will remove money from a TFSA, and 2.4% will reduce their contributions to a Registered Education Savings Plan, while 3.2% will extract funds from their RRSP.

Buying a home will likely require years of saving, Hardbacon noted, and to save for a down payment, 22.93% believe it will take five years, 5.6% think 10 years, and 6.4% expect it will take at least 15 years to have enough money for a down payment on a home.

About 17.3% of respondents will receive familial help, of whom 20% anticipate receiving $5,000-10,000, while 30% expect $15,000-30,000, and 15% think they will receive $50,000-100,000. Ten percent of respondents expect to receive more than that. Among those receiving familial help, 47% will not have to repay their parents.

“The FHSA is a tax-free savings account, but it doesn’t mean that it actually makes saving for a down payment any easier, especially in hotter real estate markets. What the survey found is that the most effective source of a down payment is the Bank of Mom and Dad. Still, not everyone is that fortunate,” Hardbacon Editor in Chief Stefani Balinsky said in the report.

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