The charge reservoir layer plays a crucial role in the charge transfer mechanism in high-temperature superconductors. The effect of reducing the thickness of the Cu0.5Tl0.5Ba2O4−δ charge reservoir by replacing Ba with Mg atom in Cu0.5Tl0.5-1223 crystal has been studied. Cu0.5Tl0.5(Ba2−xMgx)Ca2Cu3Oy (x = 0, 0.15, 0.25, 0.35) superconductor samples were synthesized by a two-step solid-state reaction method. The as-grown samples showed orthorhombic crystal structure in which the c-axis lattice parameter and unit cell volume were systematically suppressed with increasing incorporation of Mg into the final compound, thereby resulting in suppression of the charge reservoir. The room-temperature resistivity increased with the Mg doping content, while the Tc and Tc-onset values decreased according to both resistivity and alternating-current (AC) susceptibility measurements. Fourier-transform infrared (FTIR) absorption measurements revealed three phonon modes related to vibrations of Tl–OA–Cu(2), Cu(1)–OA–Cu(2), and CuO2 planar oxygen atoms at around 420 cm−1, 480 cm−1 to 540 cm−1, and 580 cm−1, respectively. The apical oxygen mode of Tl–OA–Cu(2) type was hardened whereas the position of the latter two modes remained unchanged with increasing Mg doping in the final compound. Excess conductivity analyses showed a significant decrease in the onset temperature for Cooper pair formation (T*2D−SW). The coherence along the c-axis ξc(0), the interlayer coupling J, and the Fermi velocity vF of superconducting carriers increased with increasing Mg doping at Ba sites. These result suggest that the transfer mechanism of charge carriers from the Cu0.5Tl0.5Ba2O4−δ charge reservoir layer to the conducting CuO2 planes became more efficient, as evidenced by the increased coherence length ξc(0) and Fermi velocity vF of the carriers. However, the suppression of parameters such as Bc0(T), Bc1(T), Jc0(0), and τφ indicates that the density of pinning centers was suppressed with increasing Mg doping in the final compound.