Canada Revenue Agency Raises TFSA Contribution Limit to $102,000 in 2025

The Canada Revenue Agency (CRA) has announced an increase in the tax-free savings account (TFSA) contribution limit for 2025, rising to $7,000, matching the 2024 limit. This means Canadians who have already contributed the maximum amount can add an extra $7,000 in 2025. For those who haven't contributed yet, the total room will be $102,000. TFSAs are tax-sheltered investing and savings accounts where funds and returns can be withdrawn tax-free.

The Canada Revenue Agency (CRA) has recently announced an inflation-adjusted increase in the tax-free savings account (TFSA) contribution limit for 2025 [1]. This welcome news comes as Canadians continue to navigate the economic landscape and seek ways to grow their savings.

For the upcoming year, the TFSA contribution limit will rise to $7,000, matching the 2024 limit [1]. This means that Canadians who have already maxed out their TFSA contributions in previous years can add an additional $7,000 in 2025. For those who have yet to contribute, the total contribution room will be an impressive $102,000 [1].

TFSA accounts are a popular choice for many Canadians due to their tax-sheltered nature. Contributions made to these accounts and any resulting returns can be withdrawn tax-free, making them an attractive option for both short-term and long-term savings goals [2].

The CRA's announcement of the increased contribution limit is in line with the annual inflation adjustment of most income tax and benefit amounts [1]. This adjustment ensures that the purchasing power of these amounts remains relatively stable over time.

Inflation adjustments also apply to the federal tax brackets and various amounts relating to non-refundable credits, which take effect on January 1, 2025 [1]. However, increases in amounts for certain benefits, such as the GST/HST credit and Canada Child Benefit, will only take effect on July 1, 2025 [1].

The basic personal amount (BPA) is another important factor to consider when assessing your tax situation. For 2025, the BPA will be $16,129, an increase from the previous year [1]. This means that individuals can earn up to this amount before paying any federal income tax. However, higher-income earners do not receive the full benefit of the increased BPA, as there is an income test in place [1].

In conclusion, the Canada Revenue Agency's announcement of an increased TFSA contribution limit for 2025 is a positive development for Canadians looking to grow their savings. By taking advantage of this tax-sheltered account, Canadians can work towards their financial goals while benefiting from the tax advantages it provides.

References:
[1] https://financialpost.com/personal-finance/taxes/2025-cra-tax-brackets-cpp-rrsp-tfsa
[2] https://www.canada.ca/en/revenue-agency/services/tax/individuals/registered-plans/tfsa.html