Looking ahead to 2025, the TFSA contribution limit is set to stay steady at $7,000, unchanged from 2024. For investors who’ve been eligible since the TFSA’s inception back in 2009 and haven’t contributed yet, the total contribution room will rise to a significant $102,000 from $95,000 in 2024. That’s another step in giving Canadian investors more room to grow their tax-free portfolios.
Now, while the official word from the Canada Revenue Agency on the 2024 indexation rate is still pending, we’ve got enough data on the table to make an informed call. Based on the latest CPI numbers from Statistics Canada, the federal indexation factor that determines the adjustment for TFSAs and tax brackets is looking like it’ll land at 2.7% for 2025, down from the heftier 4.7% we saw in 2024.
What’s crucial here is that the annual TFSA limit started with a baseline of $5,000 back in 2009 and has been indexed to inflation ever since.
What’s crucial here is that the annual TFSA limit started with a baseline of $5,000 back in 2009 and has been indexed to inflation ever since. When you crunch those numbers, the underlying dollar limit for 2025 comes out to roughly $7,044, which rounds neatly to $7,000 once you apply that $500 increment rule.
Bottom line; No surprises, but a consistent playing field for investors to take advantage of. The stability in the TFSA limit is a signal to keep the pedal to the metal when it comes to maximizing those tax-free gains, even in a market that’s navigating some inflationary turbulence.