Canadian savers now know how much extra room they’ll get in their tax-free savings accounts (TFSA) in the year to come.
The TFSA is a savings vehicle that allows Canadians to make contributions and grow investments inside with any withdrawals remaining tax-free.
Contribution room starts to grow every year after an individual turns 18. How much that contribution space rises is typically calculated on a base of $5,000 indexed to the rate of inflation in the preceding year, rounded to the nearest $500.
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The Canada Revenue Agency confirmed to Global News that the TFSA’s contribution limit will rise by $7,000 in 2025, matching the second largest-ever hike seen in 2024.
While prices have continued to climb throughout the past year, the pace of inflation has been significantly cooler than in the previous year, keeping the size of the increase steady.
The year with the biggest TFSA contribution limit increase was 2015, when the Conservative government of the time expanded the total savings room with a one-time jump of $10,000.
The total TFSA contribution limit for anyone born before 1991 will be $102,000 as of 2025. Individuals can check their personal TFSA space on their CRA MyAccount.
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