TFSA Limit Jumps to $6,500 in 2023 — Cumulative Room Now $88,000

Key takeaways

• The 2023 TFSA annual limit was $6,500, up from $6,000 in 2022
• Cumulative TFSA room for 2023 (if eligible since 2009) was $88,000
• Any TFSA withdrawals made in 2022 were restored to contribution room on January 1, 2023
• Over-contributions are penalized at 1% per month on the excess amount
• The TFSA limit is indexed to inflation in $500 increments

The 2023 TFSA limit increased to $6,500, the first $500 increase since 2019. The jump was driven by the indexation formula applied to the base $5,000 limit. For Canadians who have been eligible since the TFSA launched in 2009 and have never contributed, cumulative room in 2023 was $88,000.

TFSA annual limits by year

• 2009–2012: $5,000 per year
• 2013–2014: $5,500 per year
• 2015: $10,000 (one-time increase)
• 2016–2018: $5,500 per year
• 2019–2022: $6,000 per year
• 2023: $6,500
• 2024–2025: $7,000 per year

Common TFSA mistakes

The most common TFSA error is re-contributing a withdrawal in the same calendar year. If you withdraw $10,000 from your TFSA in March 2023 and contribute $10,000 back in October 2023, you have over-contributed — the room from the withdrawal is not restored until January 1, 2024. The CRA charges 1% per month on the over-contribution amount with no appeals process.

Non-residents of Canada who contribute to a TFSA pay a 1% per month penalty on contributions made while non-resident, regardless of whether they had room. Check your residency status before contributing if you have spent significant time outside Canada.