The Smith Manoeuvre has long been a popular strategy for Canadian homeowners seeking to convert their mortgage debt into tax-deductible investment debt.
However, recent tax and regulatory changes have impacted the efficacy of the Smith Manoeuvre, and further changes from the Liberal government could pose additional challenges.
In my latest video I give an analysis of the current landscape and potential future threats to this investment strategy.
You’ll learn about:
- The recent changes impacting the Smith Manoeuvre, including OSFI rules and higher capital gains inclusion rates.
- What potential Liberal policy changes could limit interest rate deductions or increase investment taxes.
- A historical context of the 19 Liberal tax increases and their effects on investors.
- Motivations behind the Liberal government's continuous tax increases, including political strategy and economic philosophy.
- Legal protections and practical reasons why a direct attack on the Smith Manoeuvre is unlikely.
- How much of the long-term benefit of the Smith Manoeuvre is tax savings and how much is investment-related?
- The resilience of the Smith Manoeuvre as an effective retirement strategy even in the face of regulatory and tax changes.
