It’s almost that time of year again. The Tax-Free Savings Account (TFSA) contribution limit for 2026 is $7,000. This means that the cumulative contribution room is now up to $109,000 depending on when you were first eligible to contribute.
Preparing for your upcoming TFSA contributions is a process that takes some thought and consideration. So, let’s review some TFSA contribution room strategies. What stocks will you buy for 2026? Will you focus on stocks with high capital appreciation potential or with strong dividend income?
Here are some things to think about and strategies to consider.
Maxing out on your contribution room
The first one is obvious. Try maxing out on your contributions. To help with this, you can set up automatic transfers that will ensure success. Pay yourself first.
This tax shelter is one that, if taken advantage of to its fullest, can reap significant rewards now and in the long term. Avoid withdrawing from this account unless absolutely essential. Finally, reinvest all your dividend and interest income to fully harness the power of tax-free compound returns.
Which TFSA stocks to buy?
After you’ve worked on maxing out your TFSA contribution room, the question becomes where to invest this money.
The best strategy here is to include a mix of high-yield bonds or stocks. Unfortunately, with interest rates being so low, the lower-risk option (bonds) isn’t really satisfactory. This means that if you want real yields, the bulk of your investments will have to be in equities (stocks).
Dividend stocks can be a really attractive option. And these days, there are quite a few that have attractive yields and/or that have strong capital appreciation potential. These dividends will be tax-free, and therefore, you have more to reinvest back into more money-making stocks. As for those capital gains, shielding them from taxes in your TFSA can also be a very lucrative proposition.
High yield, low risk
Northwest Healthcare Properties REIT (TSX:NWH.UN) is a leading owner of healthcare properties. Northwest’s properties include hospitals, outpatient and ambulatory care centres, medical office buildings, specialty clinics, and more.
Northwest Healthcare Properties is currently yielding a very generous 7%. It’s a yield that I feel confident in as a great opportunity for investors. You see, Northwest’s properties are essential. And the population is aging, so they will be increasingly in demand as time goes on.
Finally, these assets are characterized by long leases, and they’re very sticky. The average weighted average lease expiry is currently 13.4 years, its occupancy rate is at 96.9%, and almost 85% of the leases are subject to rent indexation. Also, in the real estate investment trust’s latest quarter, it saw a 90% retention ratio on expiring leases.
A natural gas powerhouse
Tourmaline Oil Corp. (TSX:TOU) is one of Canada’s largest natural gas producers. Today, Tourmaline is yielding just over 3%. But if we include the special dividends that Tourmaline pays out regularly, we see that the actual yield is much higher.
For example, in the last year, Tourmaline paid out $3.40 in dividends. This included a regular dividend as well as special dividends. The stock traded at an average price of roughly $65 during this time period. Therefore, this translates into a dividend yield of a very attractive 5.2% for the year. Looking ahead, Tourmaline has committed to paying out 100% of its free cash flow in dividends.
Also, the company is facing a very bullish natural gas outlook, with LNG Canada ramping up and strong demand expected from power centres. Natural gas prices are already heating up, and Tourmaline continues to be well-positioned for continued dividend growth as well as capital appreciation. This is what makes the stock an excellent option for maxing out your TFSA contribution limit.
