The Smith Manoeuvre – Canadian Tax Deductible Mortgage
Do you know anyone that has used this strategy? Would love your insight on this subject.
I haven’t heard the term “Smith Maneuver” in years.
I got into real estate in 2004 and this was a topic of discussion.
I had a background in finance and economics, and being a couple years out of business school, I toyed with this idea for a year or so, discussed with some clients, and brought it to the attention of one client who ran a hedge fund.
He was the only person who ever expressed interest in the idea, and after significant research and thought, he concluded, “This idea is a theoretical one, not a practical one.”
I honestly think it’s been a decade since I’ve heard “Smith Maneuver” mentioned, maybe more.
I wish I could tell you more about the idea, or my thoughts on it, but simply put, I have none. I’ve never had a client use it, and I somewhat agree with this being something that works in theory, and not in reality. I feel as though it requires an individual’s financial position to never change, and remain constant, so the steps can be repeated over and over. But life changes, people move, people start businesses and/or lose jobs, people have kids.
It runs the example into Year-25.
Who in the world can expect to know what they’re doing in Year-4 of “life after today,” let alone Year-25?