The TFSA rules began in 2009, when the annual limit was $5,000. The limit is increased by inflation but in $500 increments only. Therefore, the annuallimits are:
- $5,000 for 2009 through 2012
- $5,500 for 2013 and 2014
- $10,000 for 2015 (the Conservative government implemented this increase), and
- $5,500 for 2016 and indexed thereafter (the new Liberal government overturned the previous increase, but did not change the figure for 2015).
Any unused contribution room carries forward indefinitely. For example, if you haven’t yet made any contributions, you will have a total contribution room of $46,500 in 2016, provided you were born before 1992 so that you were at least 18 during 2009.
In addition, when you withdraw funds, the amount of the withdrawal adds to your contribution room beginning with the year following the year of withdrawal. This rule allows you to take out funds temporarily and add them back later without detrimental tax consequences. But make sure you don’t try to use the extra contribution room sooner than the next January 1, or you will be hit with penalties!