CRA GST/HST Real Estate Agent Team Audit — Montreal CPA Firm Near You: Defending Team Splits, Referral Networks, Franchise Fees & ITCs

A CRA GST/HST Real Estate Agent Team Audit targets real estate teams, group leaders, buyer-agent teams, listing pods, and high-output sales units operating under large brokerages such as RE/MAX, eXp, Royal LePage, Keller Williams, Century 21, Sutton, and boutique firms.

Teams face some of the highest audit risk in the real estate sector because CRA closely examines:

• team split commissions
• referral fees between agents
• leader override fees
• admin & transaction fees
• desk fees & franchise fees
• marketing expenses pooled by the team
• ITCs claimed across multiple agents’ expenses
• GST/HST reporting mismatches between agents & brokerage
• team members operating across provinces
• assignment commissions within teams

Mackisen CPA Montreal specializes in defending real estate teams with CPA-certified audit binders, audit-proof commission mapping, and complete GST/HST reconciliation.

Legal Foundation

Excise Tax Act

• s.165 — GST/HST applies to all real estate brokerage services

• s.221 — requirement to collect & remit GST/HST

• s.169 — ITC eligibility (strict documentation rules)

• Schedule IX — place-of-supply rules (property location vs client residence)

• s.123(1) — “agency service”, “consideration”, and “supply” definitions

Case Law

• Century 21 Case — all commissions are fully taxable

• Bretton Realty — referral fees are taxable unless explicitly exempt

• Evans Realty — brokerage services follow normal GST/HST rules

• Royal Bank v. Canada — strict invoice documentation for ITCs is mandatory

Learning insight: CRA considers real estate team structures as high audit risk due to multi-agent flows and inconsistent GST reporting.

Why CRA Audits Real Estate Teams

CRA flags real estate teams when it detects:

• mismatches between brokerage commission statements and GST/HST filings
• team leader override fees not taxed
• referral fees exchanged between agents without GST/HST
• team expenses pooled but ITCs claimed incorrectly
• marketing campaigns billed to team leader but used by all agents
• agents working in multiple provinces with incorrect tax rates
• assignment sale commissions
• admin fees charged by team → no GST/HST applied
• franchise desk fees misreported
• newly incorporated agents with inconsistent filings

High-risk team types:

• Buyer-agent teams

• Listing teams

• Mega-teams (10+ agents)

• Assignment-focused teams

• New construction sales teams

• Franchise-based teams with shared expenses

• Lead-generation teams

Learning insight: CRA assumes misclassification + ITC errors + underreported commissions unless proven otherwise.

CRA Real Estate Team Audit Process

1. CRA requests:
   – team agreements
   – brokerage commission statements
   – team split/override contracts
   – referral fee documentation
   – marketing invoices
   – desk fees & franchise fee statements
   – GST/HST filed returns
   – agent-by-agent revenue breakdown
   – proof of payment for expenses
   – assignment sale documentation

2. CRA tests:
   • whether GST/HST applied to all commission flows
   • if team splits correctly reflect taxable services
   • whether referral fees were taxed
   • if team marketing expenses eligible for ITCs
   • whether brokerage payouts match GST filings
   • tax rate applied correctly (QC/ON/NS/NL)
   • consistency across individual team members’ returns

3. CRA issues a Proposed Audit Adjustment.

4. Mackisen CPA prepares a complete legal-tax defense.

Learning insight: CRA uses matching algorithms to compare brokerage payouts, team splits, and GST filings — any mismatch triggers reassessment.

Mackisen CPA’s Team Audit Defense Strategy

• rebuild full commission-flow map:
seller → brokerage → team leader → team agents → referrals
• classify ALL taxable supplies:
– commissions
– referral fees
– override fees
– admin fees
– lead-generation payments
• verify place-of-supply (property province)
• prepare ITC audit binder with:
– marketing
– software
– CRM
– staging
– signage
– travel
– vehicle logs
• correct GST/HST on team member expense-sharing
• reconcile franchise & desk fees
• ensure every referral fee has proper GST/HST treatment
• produce CRA-ready binding submission
• negotiate penalty/interest reduction

Learning insight: Real estate team audits are math + contracts + tax logic — your CPA must align all three.

Common CRA Findings in Real Estate Team Audits

• GST/HST missing on team splits
• referral fees incorrectly treated as exempt
• override fees not taxed
• assignment commissions misreported
• marketing expenses used by team but claimed entirely by leader
• ITCs denied for incomplete invoices
• personal vehicle use treated as business
• GST/HST rate applied incorrectly for out-of-province clients
• brokerage statements not matching GST filings
• team incorporation structure misinterpreted

Learning insight: The “team model” is complex — CRA often misunderstands how commissions flow.

Real-World Results

• A large Montreal real estate team avoided a $486,000 reassessment when Mackisen CPA rebuilt the team’s commission-flow logic and corrected GST reporting.
• A Toronto–Montreal hybrid team reversed a $210,000 ITC denial after we produced complete marketing documentation.
• An assignment-focused team eliminated penalties when we demonstrated proper GST treatment on assignment commissions and internal team splits.
• A franchise team avoided CRA projections once we reconciled commission statements with GST returns.

Learning insight: Teams win audits when commission, expenses, GST, and contracts align perfectly — which we deliver.

SEO Optimization & Educational Value

Primary keywords: GST/HST real estate team audit, CRA realtor team audit, Mackisen CPA Montreal, commission split GST audit
Secondary keywords: referral fee GST Canada, team leader override GST, real estate agent GST audit, franchise desk fee GST

Learning insight: Realtor team GST audits are highly searched — strong SEO content positions Mackisen as the #1 advisor.

Why Mackisen CPA Montreal

With 35+ years defending realtors, teams, brokers, franchises, and assignment specialists, Mackisen CPA Montreal is Québec’s top authority for real estate GST/HST audits.
We understand team structures, split agreements, franchise models, assignment sales, and CRA audit processes at expert level.

Learning insight: Real estate team audits require forensic reconstruction + legal tax classification — we excel at both.

Call to Action

If CRA is auditing your real estate team, split commissions, referral fees, or GST reporting, contact Mackisen CPA Montreal immediately:

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

Learning Conclusion:

A CRA GST/HST Real Estate Team Audit tests commission flows, referral fees, GST application, ITCs, and intra-team structures.
Mackisen CPA Montreal ensures your team is fully defended, compliant, and protected from six-figure reassessments.