A number of people at work are talking about this scheme by which you can deduct your mortgage interest as an "investment expense". It's called the Smith Manoeuvre, and it's a method devised by a guy from here in BC back in the 70's.
Apparently a lot of people have been using it for years, mostly rich people with well-paid financial advisors that alert them to these things. What I want to know is, does it really work?
Near as I can tell, you need to have (a) a bank or credit union that will cooperate, (b) an investment vehicle that will guarantee a return at a rate equal to or greater than your mortgage rate over the life of your mortgage (if anyone has one of those, i'd like to hear about it).
Does anyone here use it? Have any advice? Anyone been audited?
The Telus.com article that started all of this at my office.
A tax-deductible mortgage?
A not-so-glowing review of the Smith Manoeuvre book.
The second link mentions that a Lawyer was taken to court by CCRA over this method, but the lawyer won after escalating to the supreme court of Canada. Maybe that sets a precedent? Or does it just mean that CCRA will use "other methods" to make your life difficult if you try it?