The TFSA contribution limit for 2017 is $5,500. The Tax-Free Savings Account (TFSA) was first introduced in 2009, and has gained popularity over the years as a tool for savings or investing in general. Contribution room for the TFSA is indexed to inflation and since its inception has been updated just twice. A short-lived increase to $10,000 in 2015 by the conservative government was reversed in 2016 by the new liberal government.
One of the attractions of the Tax-Free Savings Account is that investment income or returns earned are tax-free. For more details on the basics of the TFSA including eligibility, withdrawals, excess contribution penalties and investment ideas, read my TFSA overview here.
December 5, 2017 Update: The TFSA limit for 2018 has been pegged to remain at $5,500. Due to the way TFSA limit numbers are calculated and indexed to inflation, we will have to wait until at least 2019 before we see an increase in the TFSA annual contribution limit to $6,000.
TFSA Contribution Room Over The Years
Starting in 2009, Canadian residents who are at least 18 years of age and have a Social Insurance Number can participate in the TFSA. Contribution room over the years are as follows:
With inflation staying low (1.4% for 2016), the government is keeping the limit at $5,500 for 2017. Therefore, if you have met the eligibility criteria since inception and have never opened a TFSA account, your total contribution room will be $52,000 on January 1, 2017.
Update for 2018: If you have been eligible to contribute to the TFSA since its inception, you will have accumulated a total contribution room of $57,500 by January 1, 2018.
If you have been contributing to a TFSA and are not sure of your current contribution room balance, you can find that information on Canada Revenue’s My Account or call them directly on 1-800-267-6999.