CRA GST/HST Change-of-Use Audit — Montreal CPA Firm Near You: Defending Conversions Between Personal, Rental, and Business Use

A CRA GST/HST Change-of-Use Audit examines whether GST/HST was correctly self-assessed, reported, and remitted when a property changes its use — for example:
• Personal home → Rental property
• Rental property → Personal home
• Residential → Commercial use
• Commercial → Residential use
• New build → Rental
• Rental → Flip (builder classification)

These rules are extremely complex under Excise Tax Act s.191, and CRA frequently reassesses taxpayers for tens or hundreds of thousands of dollars when conversions are not correctly documented.

Mackisen CPA Montreal specializes in defending change-of-use audits by calculating the correct GST/HST liability, proving the timeline of use, and reconstructing Occupancy + Intention + Documentation needed to defeat CRA assumptions.

Legal Foundation

Excise Tax Act s.191 — self-assessment rules when the use of a residential complex changes.
Excise Tax Act s.123(1) — definitions of “builder,” “residential complex,” and “commercial activity.”
Excise Tax Act s.256.2 — rental rebate rules.
Case law:
• Cheema v. Canada — beneficial ownership drives GST liability.
• Tarnowe v. Canada — occupancy evidence is critical for determining use.

Learning insight: CRA tests use, not ownership. Your CPA must prove the correct use at the correct time.

Why CRA Audits Change-of-Use

CRA’s automated systems flag change-of-use risks when they detect:
• rental rebates claimed but property appears owner-occupied
• New Housing Rebates claimed without occupancy
• new builds rented without paying self-assessment
• Airbnb conversion (short-term → taxable)
• long-term rental converted to personal use without GST adjustment
• house sold too quickly after “personal use” claim
• substantial renovation misclassified as exempt
• mismatched addresses on ID, utilities, leases, and tax returns

Learning insight: CRA assumes non-compliance unless you prove the timeline.

CRA Change-of-Use Audit Process

1. CRA requests:
   – leases, ads, tenant communications
   – utility bills, insurance, ID address
   – mortgage and closing documents
   – Airbnb/short-term rental logs
   – renovation invoices
   – advertising & marketing records

2. CRA reconstructs your timeline of use.

3. CRA determines whether you owed GST/HST on:
   • initial occupancy
   • conversion to rental
   • conversion back to personal use
   • conversion to commercial use

4. CRA recalculates any required self-assessment under s.191.

5. CRA issues reassessment unless your CPA provides full evidence.

Learning insight: Change-of-use cases are won with chronology, not arguments.

Mackisen CPA’s Change-of-Use Defense Strategy

• build a complete use timeline (personal, rental, business)
• prove rental or personal occupancy with utilities, address history, insurance
• calculate correct self-assessment amounts where applicable
• defend principal residence use with clear evidence
• separate taxable Airbnb activity from exempt long-term rental
• document substantial renovations to avoid misclassification
• reconstruct missing records through third-party verification
• prepare CPA-certified audit binders responding to CRA’s exact questions

Learning insight: Most CRA errors occur because they misinterpret intention and use — we correct that with facts.

Common CRA Findings in Change-of-Use Audits

• GST owing on rental conversion that was never self-assessed
• rental rebate denied for lack of long-term rental proof
• personal-use claim rejected due to quick sale
• Airbnb activity causing loss of exemption
• deemed “builder” classification when property was never a business
• incorrect allocation for mixed-use properties
• substantial renovation → treated as new build
• zero documentation of when use actually changed

Learning insight: CRA findings almost always come from missing documentation, not misconduct.

Real-World Results

• A landlord avoided a $94,000 GST reassessment when Mackisen CPA proved long-term rental intent with archived ads and tenant proof.
• A client reversing short-term rental activity kept their principal residence status after we re-built a defensible timeline.
• A substantial renovation was not reclassified as a new build after we documented the original structure and extent of work.
• A homeowner avoided builder classification by presenting complete occupancy and personal-use evidence.

Learning insight: When your timeline is clearer than CRA’s assumptions, you win.

SEO Optimization and Educational Value

Primary keywords: CRA change of use audit, GST/HST change of use, rental to personal conversion audit, Mackisen CPA Montreal, GST self-assessment real estate
Secondary keywords: Airbnb GST rules, builder classification audit, rental rebate audit, property use timeline CRA

Learning insight: Clear timeline documentation strengthens both audit defense and search engine visibility.

Why Mackisen CPA Montreal

With 35+ years in real estate sales-tax defense, Mackisen CPA Montreal is Québec’s leading authority on GST/HST change-of-use audits. We understand the law, the case precedents, and the documentary evidence CRA relies on — and we prepare files that eliminate reinterpretation risks.

Learning insight: Change-of-use audits are won on paper. We prepare the paper.

Call to Action

If CRA is auditing your change of use, rental conversion, short-term rental, or new construction, get expert help immediately.
Contact Mackisen CPA Montreal for full audit defense, GST calculations, and documentation reconstruction.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA GST/HST Change-of-Use Audit tests the true use of your property. Mackisen CPA Montreal proves that use with complete, defensible evidence — protecting your rebate, your refund, and your financial security.