Planning & Advice

TFSA Limit Rollback: Back to the Future

December 16, 2015


TFSA Limit Rollback: Back to the Future

Planning & Advice

With a new party now forming a majority government in Canada, old policies are thrown out, and new ones brought in to replace them. Like a tug of war, there is a bit of back and forth. The TFSA was one of those policies up for debate.

Earlier this year, the Conservative government announced changes to Tax-Free Savings Accounts: a new $10,000 annual limit and the removal indexing (which increases the limit with inflation).

But during their election campaign, the Liberals promised to roll back the amount of money that Canadians can contribute to TFSAs each year saying that the $10,000 annual limit was only helping the wealthiest of Canadians. Earlier this month those changes were officially announced.

Effective Jan. 1, 2016 the annual contribution limit is being rolled back to $5,500 per year. Furthermore, the contribution limit will be indexed to inflation going forward (increasing in $500 increments). You can use the $10,000 limit for 2015, and if it goes unused this year it will be added to your lifetime limit, just like unused amounts from previous years.

If this sounds familiar, that’s because it is. You are not experiencing deja vu. New Finance Minister Bill Morneau essentially hit the reset button and rolled TFSA rules back to what they were at the start of 2015. The good news is that the limit for 2015 will remain at $10,000.

A closer look at the contribution room given to Canadians over the years:

Blog68_TFSARollback_ChartSo what does this mean for you? If you haven’t used the extra contribution room for 2015 yet for fear that space would be taken away, fear not. You can safely contribute $10,000 for 2015.

TFSAs remain a great investment option to shelter future income and growth from taxes, and a flexible choice for a wide range of savings goals. Let us know if you have any questions about TFSAs and we’ll be happy to help.

Looking for more info on TFSAs? Check out our other TFSA blog posts:


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