diff --git a/src/vs/workbench/contrib/debug/browser/loadedScriptsView.ts b/src/vs/workbench/contrib/debug/browser/loadedScriptsView.ts
index b090929fbd0..96bab8f09ee 100644
--- a/src/vs/workbench/contrib/debug/browser/loadedScriptsView.ts
+++ b/src/vs/workbench/contrib/debug/browser/loadedScriptsView.ts
@@ -348,7 +348,7 @@ class SessionTreeItem extends BaseTreeItem {
 					// on unix try to tildify absolute paths
 					path = normalize(path);
 					if (!isWindows) {
-						path = tildify(path, (await this._pathService.userHome).fsPath);
+						path = tildify(path, (await this._pathService.userHome()).fsPath);
 					}
 				}
 			}
diff --git a/src/vs/workbench/contrib/externalTerminal/node/externalTerminal.contribution.ts b/src/vs/workbench/contrib/externalTerminal/node/externalTerminal.contribution.ts
index c4b310c504a..84e406323be 100644
--- a/src/vs/workbench/contrib/externalTerminal/node/externalTerminal.contribution.ts
+++ b/src/vs/workbench/contrib/externalTerminal/node/externalTerminal.contribution.ts
@@ -40,7 +40,7 @@ KeybindingsRegistry.registerCommandAndKeybindingRule({
 				terminalService.openTerminal(paths.dirname(activeFile.fsPath));
 			} else {
 				const pathService = accessor.get(IPathService);
-				const userHome = await pathService.userHome;
+				const userHome = await pathService.userHome();
 				terminalService.openTerminal(userHome.fsPath);
 			}
 		}
diff --git a/src/vs/workbench/contrib/search/browser/anythingQuickAccess.ts b/src/vs/workbench/contrib/search/browser/anythingQuickAccess.ts
index c386be60bba..a749425a97f 100644
--- a/src/vs/workbench/contrib/search/browser/anythingQuickAccess.ts
+++ b/src/vs/workbench/contrib/search/browser/anythingQuickAccess.ts
@@ -643,7 +643,7 @@ export class AnythingQuickAccessProvider extends PickerQuickAccessProvider<IAnyt
 			return;
 		}
 
-		const userHome = await this.pathService.userHome;
+		const userHome = await this.pathService.userHome();
 		const detildifiedQuery = untildify(query.original, userHome.scheme === Schemas.file ? userHome.fsPath : userHome.path);
 		if (token.isCancellationRequested) {
 			return;
diff --git a/src/vs/workbench/contrib/searchEditor/browser/searchEditorInput.ts b/src/vs/workbench/contrib/searchEditor/browser/searchEditorInput.ts
index 209c1d8ad5d..8c29e078873 100644
--- a/src/vs/workbench/contrib/searchEditor/browser/searchEditorInput.ts
+++ b/src/vs/workbench/contrib/searchEditor/browser/searchEditorInput.ts
@@ -280,7 +280,7 @@ export class SearchEditorInput extends EditorInput {
 		const remoteAuthority = this.environmentService.configuration.remoteAuthority;
 		const schemeFilter = remoteAuthority ? network.Schemas.vscodeRemote : network.Schemas.file;
 
-		return joinPath(this.fileDialogService.defaultFilePath(schemeFilter) || (await this.pathService.userHome), searchFileName);
+		return joinPath(this.fileDialogService.defaultFilePath(schemeFilter) || (await this.pathService.userHome()), searchFileName);
 	}
 }
 
diff --git a/src/vs/workbench/contrib/tasks/browser/terminalTaskSystem.ts b/src/vs/workbench/contrib/tasks/browser/terminalTaskSystem.ts
index c6a26ba532c..14b7d7bdd0c 100644
--- a/src/vs/workbench/contrib/tasks/browser/terminalTaskSystem.ts
+++ b/src/vs/workbench/contrib/tasks/browser/terminalTaskSystem.ts
@@ -968,7 +968,7 @@ export class TerminalTaskSystem implements ITaskSystem {
 				windowsShellArgs = true;
 				let basename = path.basename(shellLaunchConfig.executable!).toLowerCase();
 				// If we don't have a cwd, then the terminal uses the home dir.
-				const userHome = await this.pathService.userHome;
+				const userHome = await this.pathService.userHome();
 				if (basename === 'cmd.exe' && ((options.cwd && isUNC(options.cwd)) || (!options.cwd && isUNC(userHome.fsPath)))) {
 					return undefined;
 				}
diff --git a/src/vs/workbench/contrib/terminal/browser/terminalProcessManager.ts b/src/vs/workbench/contrib/terminal/browser/terminalProcessManager.ts
index 1fe17eecc7f..9d4efdec9d8 100644
--- a/src/vs/workbench/contrib/terminal/browser/terminalProcessManager.ts
+++ b/src/vs/workbench/contrib/terminal/browser/terminalProcessManager.ts
@@ -146,7 +146,7 @@ export class TerminalProcessManager extends Disposable implements ITerminalProce
 			this.userHome = this._pathService.resolvedUserHome?.fsPath;
 			this.os = platform.OS;
 			if (launchRemotely) {
-				const userHomeUri = await this._pathService.userHome;
+				const userHomeUri = await this._pathService.userHome();
 				this.userHome = userHomeUri.path;
 				if (hasRemoteAuthority) {
 					const remoteEnv = await this._remoteAgentService.getEnvironment();
diff --git a/src/vs/workbench/services/dialogs/browser/simpleFileDialog.ts b/src/vs/workbench/services/dialogs/browser/simpleFileDialog.ts
index fd9ca23abcf..9b640a6b874 100644
--- a/src/vs/workbench/services/dialogs/browser/simpleFileDialog.ts
+++ b/src/vs/workbench/services/dialogs/browser/simpleFileDialog.ts
@@ -231,8 +231,8 @@ export class SimpleFileDialog {
 		return this.remoteAgentEnvironment;
 	}
 
-	protected async getUserHome(): Promise<URI> {
-		return (await this.pathService.userHome) ?? URI.from({ scheme: this.scheme, authority: this.remoteAuthority, path: '/' });
+	protected getUserHome(): Promise<URI> {
+		return this.pathService.userHome({ preferLocal: this.scheme === Schemas.file });
 	}
 
 	private async pickResource(isSave: boolean = false): Promise<URI | undefined> {
diff --git a/src/vs/workbench/services/path/common/pathService.ts b/src/vs/workbench/services/path/common/pathService.ts
index d7518be3b41..c2e1b21bd5a 100644
--- a/src/vs/workbench/services/path/common/pathService.ts
+++ b/src/vs/workbench/services/path/common/pathService.ts
@@ -40,9 +40,10 @@ export interface IPathService {
 	/**
 	 * Resolves the user-home directory for the target environment.
 	 * If the envrionment is connected to a remote, this will be the
-	 * remote's user home directory, otherwise the local one.
+	 * remote's user home directory, otherwise the local one unless
+	 * `preferLocal` is set to `true`.
 	 */
-	readonly userHome: Promise<URI>;
+	userHome(options?: { preferLocal: boolean }): Promise<URI>;
 
 	/**
 	 * @deprecated use `userHome` instead.
@@ -60,7 +61,7 @@ export abstract class AbstractPathService implements IPathService {
 	private maybeUnresolvedUserHome: URI | undefined;
 
 	constructor(
-		localUserHome: URI,
+		private localUserHome: URI,
 		@IRemoteAgentService private readonly remoteAgentService: IRemoteAgentService
 	) {
 
@@ -81,8 +82,8 @@ export abstract class AbstractPathService implements IPathService {
 		})();
 	}
 
-	get userHome(): Promise<URI> {
-		return this.resolveUserHome;
+	async userHome(options?: { preferLocal: boolean }): Promise<URI> {
+		return options?.preferLocal ? this.localUserHome : this.resolveUserHome;
 	}
 
 	get resolvedUserHome(): URI | undefined {
diff --git a/src/vs/workbench/services/textfile/browser/textFileService.ts b/src/vs/workbench/services/textfile/browser/textFileService.ts
index fabf89c0b32..dcc69811e72 100644
--- a/src/vs/workbench/services/textfile/browser/textFileService.ts
+++ b/src/vs/workbench/services/textfile/browser/textFileService.ts
@@ -462,7 +462,7 @@ export abstract class AbstractTextFileService extends Disposable implements ITex
 
 		// Try to place where last active file was if any
 		// Otherwise fallback to user home
-		return joinPath(this.fileDialogService.defaultFilePath() || (await this.pathService.userHome), suggestedFilename);
+		return joinPath(this.fileDialogService.defaultFilePath() || (await this.pathService.userHome()), suggestedFilename);
 	}
 
 	//#endregion
diff --git a/src/vs/workbench/test/browser/workbenchTestServices.ts b/src/vs/workbench/test/browser/workbenchTestServices.ts
index 48cca5bef2e..1449ad50c1f 100644
--- a/src/vs/workbench/test/browser/workbenchTestServices.ts
+++ b/src/vs/workbench/test/browser/workbenchTestServices.ts
@@ -1154,7 +1154,7 @@ export class TestPathService implements IPathService {
 
 	get path() { return Promise.resolve(isWindows ? win32 : posix); }
 
-	get userHome() { return Promise.resolve(this.fallbackUserHome); }
+	async userHome() { return this.fallbackUserHome; }
 	get resolvedUserHome() { return this.fallbackUserHome; }
 
 	async fileURI(path: string): Promise<URI> {