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

By: Gregory van Duyse | Posted: 10th April 2007

If you are interested in

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

And who wouldn’t be? Read on.

There is a home loan strategy called “the Smith Maneuver” that lets you achieve all of these goals, all at the same time - taux hypothécaire.

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

This strategy, formed for a mortgage product that can expressly use it, allows the mortgage holder to make an investment or pay business expenses and, over time, achieve a tax benefit from the related interest expenses. There are a number of ways in which it can work, but if it is approached properly, you can limit your risk while increasing how efficiently the strategy works for you. There are many parts to this strategy, so it is recommended that you phone and discuss your individual circumstances and how they can be addressed using this strategy. We partner with financial planners who can analyze your financial needs and put the right package together for you - taux hypothécaire.

Advantages

• Pay down your mortgage faster
• Reduce taxes
• Set up a savings plan for retirement
• Best for high-income individuals
• Best for the self-employed, but also works for salaried individuals
• Approved by financial planners, tax accounts and tax lawyers
• You can begin this strategy when you want, but you will get a greater advantage the sooner you start
• You can set it up on an automated program
• Does not require any additional fees to put the strategy in place

Disadvantages

• Should be used by people who have a mortgage which is 75% of the home value
• The borrower should be in a position to increase his payments by 2% per year
• For salaried people, the investment component must be used, so the usual risks associated with the investment has to be considered
• The strategy functions best when it is used over the longest period possible, at least ten to fifteen years, in order to reduce the investment risk as much as possible
• You should have a good grasp of investment principles, or you should solicit the help of a financial planner to help you with this understanding

How to use this strategy for the long term

There are many ways to work with this strategy, applying it to each situation, each type of property and each status of employment. The higher your taxes are, the more efficient the strategy is. You can use this strategy in conjunction with other mortgage strategies depending on your own needs - 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 lives:

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

Is there a way I can save on my taxes?

Can I find other ways to save funds for retirement?

This is a wonderful development, but there are many was the Smith Maneuver can be applied, differing from case to case. Your best bet would be to contact us and learnthe way that would work best for you.

Gregory is an Accredited Mortgage Professional (AMP). To get more information on Mortgage rates - taux hypothecaire, visit: Hypotheque - Mortgage Intelligence This article is free for republishing
Printed From: http://www.articlealley.com/article_146352_19.html
Back to the original article

Tags: circumstances, benefit from, mr smith, financial planner, mortgage holder, financial planners, income individuals, home loan, business expenses, saving for retirement, mortgage product, home value, tax benefit