CRA GST/HST Condo Flip Audit — Montreal CPA Firm Near You: Defending Builder Status, Intent, and GST on Assignment or Resale

A CRA GST/HST Condo Flip Audit targets individuals and investors who purchase pre-construction condos and later assign them or resell them shortly after closing.
CRA aggressively audits condo flips because these transactions often involve:
• assignment profits
• rapid resale
• rebate claims without occupancy
• substantial renovations after closing
• change-of-use issues
• commercial activity indicators

Mackisen CPA Montreal specializes in defending condo-flip audits by proving true intention, reconstructing occupancy and use, documenting assignment tax treatment, and preventing CRA from improperly treating you as a builder or full-time flipper.

Condo flips are one of CRA’s top real-estate audit priorities.

Legal Foundation

Excise Tax Act s.123(1) — defines “builder,” “residential complex,” and “new residential complex.”
Excise Tax Act s.165 — GST/HST applies to taxable real property, including certain condo flips.
Excise Tax Act s.191 — self-assessment rules for new residential complexes.
Case law:
• Cheema v. Canada — beneficial ownership drives tax outcomes.
• McEachern v. Canada — frequent resale = business activity.
• Tarnowe — occupancy proof is mandatory for rebate eligibility.
• Chella — intention at purchase controls GST/HST consequences.

Learning insight: Condo flip audits are intention audits — not contract audits.

Why CRA Audits Condo Flips

CRA flags condo flips when it detects:
• properties assigned before closing
• units resold immediately after occupancy
• multiple pre-construction purchases and sales
• GST/HST missing on assignment profit
• housing rebates (NHR/NRRPR) claimed without living in the unit
• sale treated as capital gains when it appears to be business income
• signs of flipping: staging, MLS activity, renovations before resale
• investment mortgages or speculative financing
• use of corporations or numbered companies

Learning insight: CRA assumes flipping = commercial business unless you prove otherwise.

CRA Condo Flip Audit Process

1. CRA requests:
   – Agreement of Purchase & Sale (APS)
   – Assignment Agreement
   – deposit receipts
   – closing documents
   – mortgage files
   – occupancy permit
   – utility bills & insurance
   – emails with builder and agents
   – MLS listings or marketing

2. CRA reconstructs:
   • intention at purchase
   • whether there was occupancy
   • whether GST/HST applies to assignment profit
   • whether the unit meets “new residential complex” rules

3. CRA issues a proposed reassessment.

4. Mackisen CPA responds with complete documentary and legal defense.

Learning insight: CRA builds a story of “you bought to flip.” Your CPA must build the true story.

Mackisen CPA’s Condo Flip Defense Strategy

• prove non-commercial intention at purchase (personal use, unforeseen circumstances, job relocation, family reasons)
• document occupancy with hydro usage, insurance, ID updates, furniture receipts
• defend against builder classification
• calculate correct GST/HST on assignment profit (often already embedded)
• defend housing rebate eligibility or correct filings
• separate genuine investment activity from flipping allegations
• prepare CPA-certified audit binders with chronological flow and legal references
• negotiate reductions in penalties and interest

Learning insight: CRA must be shown why the condo was assigned or resold — not just that it was.

Common CRA Findings in Condo Flip Audits

• seller deemed a builder → GST/HST owed on full resale price
• assignment profit treated as taxable supply → GST/HST owing
• rebate (NHR/NRRPR) denied for lack of occupancy
• profit reclassified as business income
• substantial renovations treated as “new construction”
• s.191 self-assessment applied
• GST/HST considered embedded incorrectly
• no documentation showing genuine personal-use intent

Learning insight: CRA overreaches when documentation gaps make the transaction look commercial.

Real-World Results

• A condo investor overturned a $98,000 GST assessment when Mackisen CPA proved GST was already built into the builder price and no additional tax was required.
• A young couple who assigned due to family medical issues kept their rebate after we documented personal-use intention and occupancy preparations.
• An investor avoided builder classification when we proved no pattern of flipping and no commercial activity.
• A client suspected of flipping defeated the audit after we reconstructed proof of intent to occupy that was derailed by unexpected job relocation.

Learning insight: Condo flip audits are won with life context + evidence, not with assumptions.

SEO Optimization & Educational Value

Primary keywords: CRA condo flip audit, GST/HST assignment audit, Mackisen CPA Montreal, GST on assignment profit, condo resale GST
Secondary keywords: builder classification CRA, NHR rebate audit, condo flipping tax audit, CRA real estate reassessment

Learning insight: Condo-flip tax rules are widely misunderstood — strong content earns high SEO trust.

Why Mackisen CPA Montreal

With 35+ years of CRA real estate audit defense, Mackisen CPA Montreal is Québec’s top authority on condo flip audits. Our bilingual CPAs understand builder rules, assignment taxation, rebate eligibility, and occupancy documentation — and we prepare files strong enough that CRA must accept them.

Learning insight: Condo flip audits test intent, use, and documentation — we defend all three.

Call to Action

If CRA is auditing your condo flip, assignment sale, or rebate, contact Mackisen CPA Montreal immediately.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA GST/HST Condo Flip Audit tests why you bought, why you sold, and whether GST/HST is owed. Mackisen CPA Montreal proves the truth — protecting your rebate, your profit, and your tax position.