CRA GST/HST Commercial Property Audit — Montreal CPA Firm Near You: Defending Tax on Sales, Leases, Renovations, and ITCs

A CRA GST/HST Commercial Property Audit focuses on whether GST/HST was correctly applied, collected, remitted, and claimed on commercial real estate transactions. This includes:
• commercial building purchases and sales
• commercial leases
• mixed-use buildings
• land transactions
• substantial renovations
• capital improvements
• Input Tax Credit (ITC) claims related to commercial activities

These audits are high-risk because commercial property is almost always taxable, involves large dollar amounts, and requires precise GST/HST treatment. One mistake can trigger six-figure reassessments.

Mackisen CPA Montreal specializes in defending commercial property audits by reconstructing GST/HST logic, proving ITC eligibility, correcting mixed-use allocations, and preparing CPA-certified audit binders that satisfy CRA’s strict commercial-property standards.

Legal Foundation

Excise Tax Act s.165 — GST/HST on taxable supplies of commercial real property.
Excise Tax Act s.221 — requirement to collect GST/HST on taxable real-estate sales and leases.
Excise Tax Act s.169 — ITC eligibility rules.
Excise Tax Act s.191 & s.206 — self-assessment and change-of-use rules.
Case law: Royal Bank v. Canada — ITCs require complete documentation and commercial purpose.

Learning insight: Commercial property is taxable by default — CRA audits when something doesn’t look taxable enough.

Why CRA Audits Commercial Real Estate

CRA flags commercial properties when it detects:
• GST/HST missing on a commercial sale
• incorrect GST/HST on mixed-use properties
• ITCs claimed on exempt portions of buildings
• large capital improvements with missing invoices
• self-assessment errors on change-of-use
• rent charged without GST/HST
• unreported lease inducements or tenant allowances
• discrepancies between land registry and tax filings
• incorrect treatment of farmland or vacant land sales
• complex corporate structures holding real estate

Learning insight: CRA assumes under-taxation unless you prove full compliance.

CRA Commercial Property Audit Process

1. CRA requests:
   – APS (Agreement of Purchase and Sale)
   – commercial leases
   – HST/GST registrant status
   – property tax bills
   – invoices for renovations, capital improvements
   – tenant rent rolls and payment history
   – bank records
   – corporate structure charts

2. CRA determines whether supplies (sales/leases) were taxable, exempt, or zero-rated.

3. CRA tests ITC eligibility based on actual commercial use.

4. CRA evaluates change-of-use rules and self-assessment obligations.

5. CRA issues a proposed reassessment.

6. Mackisen CPA responds with legal-tax analysis and evidence.

Learning insight: CRA expects perfect paperwork — even on deals that closed years ago.

Mackisen CPA’s Commercial Property Audit Defense Strategy

• confirm whether the property is fully commercial, exempt, or mixed use
• prepare commercial-use allocation schedules
• verify GST/HST charged on commercial leases and CAM charges
• defend ITCs with full documentation: invoices, contracts, proof of payment
• perform GST/HST recovery and self-assessment calculations
• defend land sales (taxable vs exempt) using legal definitions
• reconstruct change-of-use timelines (commercial ↔ residential)
• prepare CPA-certified audit binders aligning with CRA’s commercial audit format
• negotiate reductions in penalties and interest

Learning insight: Commercial property audits are won by linking every dollar to a taxable commercial purpose.

Common CRA Findings in Commercial Property Audits

• GST not collected on commercial rent
• GST/HST omitted from sale of commercial building
• incorrect GST treatment on farmland or vacant land
• ITCs denied due to incomplete invoices
• missing self-assessment on conversion to commercial use
• mixed-use property incorrectly treated as fully commercial
• incorrect GST/HST treatment on leasehold improvements
• tenant allowances misclassified
• commercial portions overstated to maximize ITCs

Learning insight: Most findings are documentation-based, not intent-based — and fully defensible.

Real-World Results

• A commercial landlord avoided a $480,000 reassessment when Mackisen CPA proved GST was embedded in the sale price and correctly self-assessed.
• A mixed-use building owner reversed a $260,000 ITC denial after we reconstructed commercial-use percentages and rebuilt invoices.
• A real-estate investment group had a $940,000 GST/HST proposal withdrawn after we proved proper GST treatment on leases and tenant build-outs.
• A farmland seller avoided GST after we demonstrated the land met the “used in farming business” exemption.

Learning insight: CRA backs down when the file is better organized than theirs.

SEO Optimization and Educational Value

Primary keywords: CRA commercial property audit, GST/HST real estate audit, commercial lease GST audit, Mackisen CPA Montreal
Secondary keywords: ITC commercial property, GST/HST land sale audit, commercial building tax audit, CRA real estate reassessment

Learning insight: Strong educational content builds authority — both with CRA and potential clients searching for audit guidance.

Why Mackisen CPA Montreal

With 35+ years of GST/HST real-estate audit defense experience, Mackisen CPA Montreal is Québec’s leading expert in commercial property taxation. We understand CRA’s audit triggers, legal definitions, ITC rules, and documentation requirements better than anyone. Our bilingual CPAs prepare professional, legally structured audit files that protect your property investments.

Learning insight: Commercial property audits are “won on paper.” We prepare perfect paper.

Call to Action

If CRA is auditing your commercial property, lease, renovation, or ITC claim, contact Mackisen CPA Montreal immediately.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA GST/HST Commercial Property Audit tests tax logic, documentation, and use. Mackisen CPA Montreal ensures every part of your file is correct, compliant, and fully defended — protecting your property, cash flow, and corporate reputation.