A tax-free savings account (TFSA) lets investment growth and withdrawals stay tax-free. Contributions are not deductible, unlike an RRSP. It suits almost any goal, including a down payment, though first-time buyers should look at the FHSA first.
When your room starts
You build room every year from the year you turn 18 and are a resident of Canada, starting no earlier than 2009. Unused room carries forward with no limit.
The yearly limits
$5,000 a year from 2009 to 2012, $5,500 in 2013 and 2014, $10,000 in 2015, $5,500 from 2016 to 2018, $6,000 from 2019 to 2022, $6,500 in 2023 and $7,000 in 2024, 2025 and 2026. Someone who has been eligible since 2009 and never contributed has $109,000 of room in 2026. Source: CRA limits.
Withdrawals come back next year
When you take money out, the amount is added back to your room on January 1 of the following year, not right away. Putting it back in the same year can create an over-contribution unless you already have unused room. Investment losses never give room back.
Over-contributions
Any excess is taxed at 1% a month for each month it stays in the account. Your CRA account shows your room, but it is only updated once a year with the previous year’s transactions, so keep your own records.
Work out your room
The TFSA room calculator adds up the limits from the year your room started, your contributions and your withdrawals. Saving for a first home? Compare it with the FHSA calculator.
Try the tfsa room calculator →
Official source
CRA · Calculate your TFSA contribution room
This guide explains general rules. Confirm your figures with your lender, lawyer, or the official source before you act.