Switching funds within the same TFSA- how is contribution room impacted?

Question

I have a TFSA mutual fund account with TD Canada Trust and am looking to do some re-balancing of funds within this account. I am aware that I can use the "Switch funds" feature to accomplish this.

However, I was wondering if using the switch option will have an impact on my contribution room for the year?

Example: if I switch $1,000 from the Canadian Index-e to European Index-e fund, will that mean that I have used/lost $1,000 of my contribution room? Or, since the funds are staying within the same TFSA, the contribution room stays unaffected?

Answer 1

No, you only lose the room for the remainder of the year if you withdraw funds. As long as there are no withdrawals, you're fine.

Note I said "remainder of the year", that's because you'll regain this room at the start of the next calendar year.