The 2027 TFSA Limit Is $7,500. September’s CPI Already Settled It.
The 2027 TFSA limit is $7,500, up from $7,000, and it is the first increase since 2024. For a person who was 18 or older in 2009 and resident in Canada throughout, cumulative contribution room goes from $109,000 in 2026 to $116,500 in 2027.
That number is not a forecast. The Income Tax Act fixes the limit from Consumer Price Index data for the twelve months ended September 30, and Statistics Canada published the September 2026 figure on October 19, 2026, which closed the window. The Canada Revenue Agency has not put its 2027 figures out yet, but the Act does not wait on the announcement to determine the amount. Every input it uses is already public.
The limit is $5,000 indexed since 2009, not last year’s limit grown by inflation
This is the part almost everyone gets wrong, and it explains both why the limit stood still for three years and why it jumps $500 in one step now. Here is the definition, from Income Tax Act section 207.01(1):
TFSA dollar limit for a calendar year means, (a) for 2009 to 2012, $5,000; (b) for 2013 and 2014, $5,500; (c) for 2015, $10,000; and (d) for each year after 2015, the amount (rounded to the nearest multiple of $500, or if that amount is equidistant from two such consecutive multiples, to the higher multiple) that is equal to $5,000 adjusted for each year after 2009 in the manner set out in section 117.1.
Read paragraph (d) closely. The amount being indexed is $5,000, adjusted for every year after 2009. The rounding to the nearest $500 happens at the end, to the running total, and the rounded figure is never carried forward. Next year’s calculation starts again from the unrounded amount. The published limit is a display value sitting on top of a continuous series that moves every single year.
Paragraph (c) is the exception that proves it. The $10,000 limit for 2015 was written into the statute rather than produced by indexation, so it sits outside the chain entirely. That is why 2016 dropped back to $5,500 instead of holding at $10,000.
The dollar limit is only one input into any individual’s room. Unused room carries forward, and withdrawals are added back, both of which our TFSA guide works through in detail. What follows is strictly about the annual number the Act generates.
The underlying series, with what it rounds to:
| Year | $5,000 indexed, unrounded | Limit | CRA published |
|---|---|---|---|
| 2016 | 5,559.31 | $5,500 | $5,500 |
| 2017 | 5,637.14 | $5,500 | $5,500 |
| 2018 | 5,721.70 | $5,500 | $5,500 |
| 2019 | 5,847.57 | $6,000 | $6,000 |
| 2020 | 5,958.68 | $6,000 | $6,000 |
| 2021 | 6,018.26 | $6,000 | $6,000 |
| 2022 | 6,162.70 | $6,000 | $6,000 |
| 2023 | 6,550.95 | $6,500 | $6,500 |
| 2024 | 6,858.85 | $7,000 | $7,000 |
| 2025 | 7,044.04 | $7,000 | $7,000 |
| 2026 | 7,184.92 | $7,000 | $7,000 |
| 2027 | 7,371.72 | $7,500 | not yet published |
Our reconstruction of that chain reproduces all eleven published limits from 2016 to 2026, the years paragraph (d) actually governs, and it agrees with the amounts the statute hard-codes for 2013 and 2014.
Two indexation steps moved the underlying amount and the published limit stayed at $7,000
Look at the unrounded column for 2024, 2025 and 2026: $6,858.85, then $7,044.04, then $7,184.92. The underlying amount rose in both steps. The published limit did not move in either, because all three values round to $7,000. The boundary is $7,250, and none of them reached it.
The 2027 value, $7,371.72, clears $7,250 by $121.72. Nothing about this one is marginal. A rounding call that came down to a few cents would be worth hedging. A $121.72 cushion is not.
The same arithmetic sets the next step. An $8,000 limit requires the unrounded amount to reach $7,750, which is a further 5.13% of cumulative indexation from where it now sits. That is more than one year’s worth at anything like the current pace of inflation, and the gap closes only as fast as the index does. Our arithmetic on the figures above: at 2.6% a year, two further years of indexation clear 5.13% and one does not. The staircase shape is not a quirk of the last decade. It is what rounding a smoothly rising series to $500 steps always produces.
The 2.6% factor, and the seven-year test that supports it
The indexing machinery sits in section 117.1 of the Income Tax Act. The factor is the formula (A/B) – 1, where A is the Consumer Price Index for the twelve months ended September 30 before the year in question and B is the same average for the twelve months immediately before that, with the result rounded to the nearest one-thousandth. Subsection (4) defines the index for a twelve month period as the monthly all-items CPI for Canada aggregated over the period, divided by twelve, and rounded to the nearest one-thousandth.
Running that on Statistics Canada table 18-10-0004, Consumer Price Index, monthly, not seasonally adjusted:
| Quantity | Value |
|---|---|
| Average all-items CPI, 12 months to September 2026 | 167.525 |
| Average all-items CPI, 12 months to September 2025 | 163.275 |
| Ratio | 1.02602970 |
| Rounded to the nearest one-thousandth | 1.026 |
| Indexation increase for 2027 | 2.6% |
The reason to trust that 2.6% is that the same method, pointed at earlier CPI windows, reproduces the increase the CRA itself published for each of the last seven years: 1.9% for 2020, 1.0% for 2021, 2.4% for 2022, 6.3% for 2023, 4.7% for 2024, 2.7% for 2025 and 2.0% for 2026. Seven for seven, including the 6.3% spike, which is the year a subtle averaging or rounding error would most likely have surfaced.
That 2.6% applies to the indexed personal income tax amounts generally, not only to the TFSA. Each of the four federal bracket thresholds rises by the same factor. The 2026 thresholds are $58,523, $117,045, $181,440 and $258,482, so the first one moves by roughly $1,500. Landing the exact dollar on an indexed amount is harder than multiplying by the factor. The section below does it for the amounts the CRA’s indexation table covers, working out which of them can be settled now, and why the obvious method settles some of them wrongly.
Stacking the annual limits that CRA guide RC4466 sets out, a person who was 18 or older in 2009 and resident in Canada throughout has lifetime room of $102,000 through 2025, $109,000 through 2026 and $116,500 through 2027. Anyone who turned 18 later starts counting from their own year, which makes the total personal rather than universal. Our TFSA contribution room calculator answers that version of the question, including the effect of past contributions and withdrawals.
The shortcut that almost works, and misses by a dollar
There is a tempting way to project next year’s indexed tax amounts: take the figure the CRA published for this year and multiply by the factor. It is not what the Act does. Section 117.1(1)(a) indexes “the amount that would, but for subsection (3), be the amount to be used under the relevant provision for the preceding taxation year”, and subsection (3) is the rounding provision. The chain runs on the unrounded prior-year amount, exactly as the TFSA limit does, so starting from a published and therefore rounded figure starts from the wrong place.
We tested the shortcut against twenty-two of the amounts the CRA publishes on its indexation tables for 2020 through 2026. It produced 32 wrong answers across 128 amount-years, and 16 of the 22 amounts tested were wrong in at least one year. The error is always exactly one dollar, in either direction:
| Amount | Year | Shortcut gives | CRA published |
|---|---|---|---|
| Age amount | 2026 | $9,209 | $9,208 |
| Canada employment amount | 2026 | $1,500 | $1,501 |
| Medical expense credit, 3% of net income ceiling | 2026 | $2,891 | $2,890 |
| Canada caregiver amount, child under 18 | 2026 | $2,741 | $2,740 |
| Taxable income above which the 33% bracket begins | 2023 | $235,676 | $235,675 |
| Disability amount | 2025 | $10,139 | $10,138 |
Running the chain the Act specifies does better than flag the shortcut’s errors. Subsection 117.1(3) rounds to the nearest dollar, so every figure the CRA has already published pins the unrounded amount to half a dollar either side of it, a band one dollar wide: a published $9,208 means the true amount sits somewhere between $9,207.50 and $9,208.50. Intersecting those bands year by year leaves an interval containing exactly one whole dollar for sixteen of the amounts, which settles their 2027 figures outright. Six of the sixteen are cleaner still, because the Act names their starting figures in whole dollars instead of leaving them to be inferred from a band. Section 117.1(2) names $15,000 and $12,298 for the two basic personal amounts. Subsection 117(2), headed “Rates for taxation years after 2024”, writes the four bracket amounts in as $57,375, $114,750, $177,882 and $253,414, which are the 2025 figures. Each of those six chains is exact arithmetic from a known dollar, which is why all four bracket thresholds come out determined.
| Amount | 2026 | 2027 |
|---|---|---|
| Taxable income above which the 33% bracket begins | $258,482 | $265,203 |
| Taxable income above which the 29% bracket begins | $181,440 | $186,157 |
| Taxable income above which the 26% bracket begins | $117,045 | $120,088 |
| Taxable income above which the 20.5% bracket begins | $58,523 | $60,044 |
| Canada workers benefit, family net income threshold | $33,960 | $34,843 |
| Adoption expenses, maximum per adoption | $19,972 | $20,491 |
| Basic personal amount, maximum | $16,452 | $16,879 |
| Basic personal amount, minimum | $14,829 | $15,214 |
| Disability amount | $10,341 | $10,610 |
| Canada caregiver, infirm dependants 18 or older | $8,773 | $9,001 |
| Disability supplement for children | $6,032 | $6,189 |
| Child care and attendant care expense threshold | $3,533 | $3,625 |
| Canada caregiver amount, child under 18 | $2,740 | $2,812 |
| Canada workers benefit, disability supplement | $1,534 | $1,574 |
| Canada employment amount | $1,501 | $1,540 |
| Tradespersons tools threshold | $1,501 | $1,540 |
The shortcut disagrees with four of the sixteen, giving $60,045 for the 20.5% bracket threshold against $60,044, $16,880 for the maximum basic personal amount against $16,879, $15,215 for the minimum against $15,214, and $2,811 for the Canada caregiver amount for a child under 18 against $2,812. That is the one dollar error caught in the act, on four figures a reader can check against the CRA’s own table when it appears. One thing can still move any of the sixteen, and this article has just found it happening twice: Parliament can write a new base into the Act, as it did for the bracket amounts after 2024 and for the basic personal amount in 2023. Short of that, the arithmetic is done.
The TFSA limit is immune to all of this, which is why the headline number can be stated flatly. Its rounding step is $500 rather than $1, and the 2027 value clears the boundary by $121.72. A one dollar ambiguity in the chain cannot move a figure with a $121.72 cushion under it.
The room arrives January 1
The new room is dated to the calendar year, so the $7,500 is there on January 1, 2027, in full, with no need to wait for a CRA notice or a published table before using it. Whether that $7,500 belongs in a TFSA rather than an RRSP or an FHSA is a separate decision, and one we compare the three accounts on directly.
The date matters in the other direction too. Room created by a withdrawal is not restored when the money leaves, but on January 1 of the following year, so someone who took money out of a TFSA during 2026 and put it back in December 2026 has over-contributed, unless they were carrying enough unused room to absorb the re-contribution. Income Tax Act section 207.02 taxes an excess TFSA amount at 1% of the highest excess amount in the month, for every month the excess stands. Waiting until January 1 costs nothing and avoids the charge entirely.
For the dollars that do go in, the account is a container and not an investment, and what fills it is what determines the outcome. Our rundown of TFSA stocks for Canadian investors is where we take that question up.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. The 2027 figures in this article are computed from the Income Tax Act (sections 117, 117.1 and 207.01) and Statistics Canada table 18-10-0004, all-items Consumer Price Index for Canada, not seasonally adjusted, for the twelve months ended September 30, 2026. Annual TFSA limits to 2025 are from CRA guide RC4466 and the 2026 limit from the CRA indexation table. The Canada Revenue Agency had not published its 2027 indexation table as of October 28, 2026; its table covered 2023 through 2026.
