CRA GST/HST Home Inspection, Building Inspection & Pre-Purchase Assessment Audit — Montreal CPA Firm Near You: Defending Taxable Services, Report Fees, Subcontractors & ITCs

A CRA GST/HST Home Inspection & Building Assessment Audit targets:

• residential home inspectors
• commercial building inspectors
• pre-purchase and pre-sale inspectors
• new-construction deficiency inspectors
• insurance inspection contractors
• mold/moisture diagnostic inspectors
• asbestos / radon / air-quality inspectors
• energy efficiency auditors
• thermal imaging (infrared) inspectors
• multi-unit building inspection firms

CRA audits this industry heavily because inspection services are always taxable, involve mobile operations, high equipment ITCs, subcontracted specialists, large report fees, and cash/e-transfer payments that often don’t reconcile with GST filings.

Mackisen CPA Montreal specializes in defending inspection audits by rebuilding job-level documentation, validating subcontractors, mapping tax rates, and preparing CRA-compliant audit binders.

Legal Foundation

Excise Tax Act

• s.165 — ALL inspection, testing & diagnostic services are fully taxable

• s.221 — mandatory GST/HST collection

• s.169 — strict ITC evidence rules (invoice + proof of payment)

• s.141.01 — allocation for mixed-use tools/equipment

• Schedule IX — place-of-supply rules for multi-province inspections

• s.286 — recordkeeping requirements

• s.123(1) — defines “inspection”, “service”, “report”, “consideration”

Case Law

• Royal Bank v. Canada — ITCs denied if invoices incomplete

• CGI v. Canada — tax rate determined by location of service

• Northwest Company Inc. — supplier documentation must be precise

• CRA rulings: no exemption applies to building inspections, even when report is required by a bank or insurance company

Learning insight: Home inspections are ALWAYS taxable — no exceptions, exemptions, or special cases.

Why CRA Audits Home Inspection & Building Assessment Companies

CRA flags inspection businesses when it detects:

Revenue Risks

• GST/HST not charged on inspection or report fees
• multi-service packages improperly taxed
• mileage/travel fees missing GST
• thermal imaging add-ons not taxed
• re-inspection fees untaxed
• cash/e-transfer revenue underreported
• deposits not included in GST period
• platform bookings (Square/Stripe) not matching GST returns
• corporate inspection contracts taxed incorrectly
• QC-ON-Atlantic rate mistakes for out-of-province inspections

Subcontractor Risks

• subcontracted inspectors lacking valid GST numbers
• incomplete subcontractor invoices
• engineers/assessors subcontracted improperly
• employee vs subcontractor misclassification

ITC Risks

• missing invoices for:
– inspection tools (moisture meters, infrared cameras, ladders)
– software (Report writing apps, HomeGauge, Spectora)
– safety gear (PPE, respirators)
– vehicle expenses
– batteries, flashlights, small tools
• imported equipment missing s.218 self-assessment
• personal-use tools claimed as business
• home-office expenses overstated

Operational Risks

• inspection logs not matching invoices
• GPS travel inconsistent with claimed mileage
• re-inspection jobs missing documentation
• platform payout reports vs deposits mismatched
• poor contract documentation

High-risk profiles:

• solo inspectors

• firms with multiple subcontractors

• inspectors offering thermal imaging or advanced diagnostics

• inspectors serving multiple provinces

• insurance-mandated inspection contractors

Learning insight: CRA assumes underreported revenue + invalid ITCs + subcontractor inconsistencies unless disproven with solid evidence.

CRA Home Inspection Audit Process

1. CRA requests:
   – inspection contracts & booking confirmations
   – invoices (inspection + add-ons + travel)
   – subcontractor invoices & GST numbers
   – inspection logs / job calendar
   – thermal imaging logs & reports
   – bank & e-transfer statements
   – platform reports (Square, Stripe, PayPal)
   – fuel & vehicle logs
   – software subscriptions
   – equipment purchase invoices
   – ITC spreadsheets

2. CRA tests:
   • GST/HST applied to ALL inspection services
   • correct GST/HST rate for cross-province clients
   • subcontractor compliance
   • ITC documentation completeness
   • personal vs business tool use
   • reconciliation of logs → invoices → deposits → GST filings
   • imported tools → self-assessment
   • deposit timing vs GST periods

3. CRA issues Proposed Audit Adjustment.

4. Mackisen CPA prepares complete legal + documentary defense.

Learning insight: CRA reconstructs the entire year of revenue from job calendar + deposits + reports.

Mackisen CPA’s Inspection Audit Defense Strategy

• create an Inspection Supply Tax Matrix (inspection, report, add-ons, travel)
• rebuild correct GST/HST invoices
• verify subcontractor GST registration status
• reconstruct ITC binder for tools, software, PPE, vehicle
• correct province-specific GST/HST rate logic
• defend mileage claims using GPS & job logs
• reconcile inspection calendar → invoices → bank deposits
• separate personal vs business equipment
• rebuild self-assessment entries (imported tools)
• prepare CPA-certified CRA audit binder
• negotiate reduction of penalties & interest

Learning insight: Inspection companies win audits with job-by-job reconstruction, complete ITC binders, and valid subcontractor documentation.

Common CRA Findings in Home Inspection Audits

• GST/HST not charged on:
– base inspection
– re-inspection
– thermal imaging
– travel/mileage
– report writing fees
• invalid subcontractor invoices
• missing ITC documentation
• imported cameras/meters missing self-assessment
• deposits not included in GST period
• bank deposits exceed reported sales
• mixed-use tools claimed improperly
• multi-province services taxed incorrectly

Learning insight: The biggest assessments come from invoice defects, subcontractor non-compliance, and ITC gaps.

Real-World Results

• A Montreal inspector avoided a $224,000 reassessment after Mackisen CPA rebuilt his inspection logs and subcontractor documentation.
• A multi-inspector firm reversed a $147,000 ITC denial through complete equipment/software documentation.
• A commercial inspection company eliminated penalties by correcting QC-ON rate issues.
• A thermal-imaging specialist cleared CRA findings via calendar→deposit→GST reconciliation.

Learning insight: CRA backs down when shown CPA-organized, transparent documentation.

SEO Optimization & Educational Value

Primary keywords: GST/HST home inspection audit, CRA building inspector audit, taxable inspection services Canada, Mackisen CPA Montreal
Secondary keywords: thermal imaging GST rules, inspection ITC denial, subcontractor GST audit, pre-purchase audit GST/HST

Learning insight: Home inspection GST audits generate high SEO traction due to rapid industry growth.

Why Mackisen CPA Montreal

With 35+ years defending home inspectors, building assessors, and diagnostic technicians, Mackisen CPA Montreal is Québec’s #1 authority on GST/HST inspection-sector audits.
We understand inspection workflows, tools, report systems, subcontractors, and CRA methodologies.

Learning insight: Inspection audits require job tracing + tool documentation + subcontractor validation + rate accuracy — all strengths of Mackisen CPA.

Call to Action

If CRA is auditing your home inspection, building assessment, thermal imaging, or property diagnostic business, contact Mackisen CPA Montreal immediately:

📞 514-276-0808
📧 info@mackisen.com
🌐 mackisen.com

Learning Conclusion:

A CRA GST/HST Home Inspection Audit tests taxable service classification, cross-province GST rates, subcontractor compliance, job-log accuracy, and ITC documentation.
Mackisen CPA Montreal provides complete protection from reassessments.