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How to make your mortgage tax deductible (the Smith Maneuver) ?

If you are interested in

-Paying off your mortgage faster (taux hypothécaire)
-Saving taxes
-Saving for retirement

And who wouldn’t be? Read on.

The “Smith Maneuver” mortgage approach accomplishes these three objectives all together. (It is not even possible to not do them all at the simultaneously) - taux hypothécaire.

This particular mortgage strategy is named for its inventor, Fraser Smith. Mr. Smith is a financial planner in British Colombia who developed this interesting strategy a few years ago. I was fortunate enough to be one of three mortgage consultants from Quebec to meet Mr. Smith when he spoke on this topic in Toronto.

This strategy uses a mortgage product that was conceived for this purpose. It permits the homeowner to make an investment or pay business expenses and use this interest debt to reduce the interest to generate tax deductions. This strategy can work in a number of ways, and if you work with it properly, you can limit risk and increase the efficiency of the program. Since it has so many components, the best thing is to discuss it by phone so that the best solution for your case can be worked out. We coordinate with financial planners who understand this strategy and can pull together all of the pieces just for you (taux hypothécaire).

Advantages

• Pay down your mortgage faster
• Reap tax savings
• Save for retirement
• Best for high income individuals
• Best for self-employed, but can be used for salaried employees as well
• Has been approved by tax lawyers, accountants and financial planners
• You can start the strategy any time, but the earlier the better
• It can be set up on an automated program
• There are no additional fees required

Disadvantages

• It is best for those with a mortgage that is 75% of the value of their home
• The strategy requires that the home owner can increase his payments by 2% per annum
• If the investment piece is used (mandatory in the case of a salaried employee), there is always the risk associated with the investment
• In order to reduce the risks associated with the investment, this kind of mortgage should be used over the longest possible period (10 to 15 years or more)
• It requires a good understanding of certain principles of investment, or the assistance of a financial planner

When to use this strategy for the long term

This strategy can be used in many situations, for all kinds of properties, and for every status of employment. The more you pay in taxes, the better this strategy works. This strategy can be combined with other strategies depending upon individual requirements (taux hypothécaire).

What does all of this mean to us?

Thanks to Fraser Smith, we will be able to answer three critical questions important to our financial situation:

Is there a quicker way to pay off my mortgage? - taux hypothécaire

Is there a way I can save on my taxes?

Can I find other ways to save funds for retirement?

For more information on this type of mortgage strategy, get in touch with us and you will learn how the principles of the Smith Maneuver can help you with your home loan and your taxes.