Risk Management Strategic Partners
The Smith Manoeuvre

A home owner who has a $200,000 mortgage at 7% for 25 years and is in a 40% tax bracket will have to earn $700,402 before taxes to pay off the $200,000 mortgage plus the interest expense of $220,241. No wonder it's difficult to save for the future! If however, you convert that interest to the tax-deductible variety, you will generate refund cheques each year totalling approximately $88,096. If you use those refunds -- the tax department's money -- to pay down your mortgage faster, you'll see it melt away many years sooner than you imagined possible. This can be achieved by applying the Smith Manoervre.

The Smith Manoeuvre teaches you how to turn your mortgage into annual tax refunds. It is a remarkably efficient way for you and your family to raise large amounts of new money, through free tax refunds, so that you can start building a larger nest egg sooner.

Take a look at this list of other benefits and what you can do with the tax saved:

  • Saving tax frees up extra money
  • Clear up credit card debt
  • Pay down your mortgage
  • A higher retirement income
  • Pay for a Vacation

This creative strategy is legal and is based on Canada Revenue Agency (formerly Revenue Canada) rules and regulations. Like the many wealthy Canadians who have successfully used this strategy to increase their net worth, once implemented, you will see your investment portfolio grow as fast as you reduce your mortgage. The Smith Manoeuvre converts non-deductible interest debt (bad debt) to tax -deductible interest debt (good debt). Loans such as car loans, vacation loans and especially home mortgage loans are considered bad debt and cost Canadians millions of dollars in interest annually. Interest from bad debt is not tax deductible. If this same amount of interest is treated as a tax deduction, there could be a noticeable reduction in income taxes paid and possibly even impressive tax refund cheques. If you have interest to pay why not at least convert it to interest that will allow you to receive a tax refund.