CRA GST/HST Real Estate Assignment Commission Audit — Montreal CPA Firm Near You: Defending Assignment Fees, Shared Commissions, Team Splits & Builder Transactions

A CRA GST/HST Real Estate Assignment Commission Audit focuses on the brokerage commissions and agent fees earned from assignment sales — a high-risk area because assignment transactions involve multiple parties, complex structures, and inconsistent GST/HST treatment.

CRA aggressively audits assignment-related commissions because:
• assignment transactions often involve non-occupancy,
• GST/HST rules differ for assignor vs assignee,
• some agents misapply GST/HST on assignment fees,
• team splits and referral fees create additional GST/HST layers,
• builder documentation is often incomplete,
• many assignment commissions flow through multiple brokerages,
• and CRA frequently suspects under-reporting or misclassification.

Mackisen CPA Montreal specializes in defending real estate assignment commission audits by reconstructing the full commission flow, validating GST/HST treatment, reviewing team/referral structures, and preparing CPA-certified audit binders that prevent reassessments.

Legal Foundation

Excise Tax Act

• s.165 — GST/HST applies to taxable services (real estate agency services are ALWAYS taxable).

• s.221 — obligation to collect/remit tax on commissions.

• s.169 — ITCs require strict documentation.

• Schedule IX — provincial place-of-supply rules for assignment commissions.

• s.123(1) — defines “agency service”, “consideration”, “builder”.

Case Law

• Century 21 Case — real estate commissions are taxable regardless of property status.

• Bretton Realty — referral fees also subject to GST/HST.

• Cheema — assignment rules depend on beneficial ownership.

• McEachern — multiple assignments can trigger “builder” classification for clients.

Learning insight: CRA cares about commission tax treatment, not whether the property is taxable or exempt.

Why CRA Audits Assignment Commissions

CRA flags assignment commission files when it detects:
• GST/HST not charged on assignment-related commissions
• team commissions flowing without proper GST/HST treatment
• referral fees (domestic or international) not taxed
• builder-paid commissions misreported
• assignments involving corporations or numbered companies
• agent earning commissions in another province
• double-commission situations (assignor + assignee)
• inconsistent reporting between brokerage statements and GST returns
• missing ITCs for marketing and transaction expenses
• assignment fees disguised as “administration fees” or “referral bonuses”

High-risk situations:

• pre-construction condo assignments

• builder assignment programs

• assignment deals without occupancy

• assignment teams working across provinces

• commissions split between multiple agents/brokerages

Learning insight: CRA assumes commission misclassification unless proven otherwise.

CRA Assignment Commission Audit Process

1. CRA requests:
   – brokerage statements
   – assignment agreements
   – APS (original purchase agreements)
   – team split & referral fee agreements
   – commission breakdowns (assignor vs assignee)
   – invoices for marketing & lead generation
   – bank statements
   – ITC documentation
   – franchise fee statements (if applicable)

2. CRA tests:
   • whether GST/HST was charged on ALL commissions
   • correct provincial tax rate (property location vs client mailing address)
   • whether assignment fees were taxable
   • referral fees properly taxed
   • team or brokerage split agreements properly structured
   • ITCs supported with complete documentation

3. CRA issues Proposed Audit Adjustment.

4. Mackisen CPA prepares a full, detailed defense.

Learning insight: CRA uses matching—brokerage payouts vs reported GST/HST—to find discrepancies.

Mackisen CPA’s Assignment Commission Audit Defense Strategy

• rebuild the full commission flow: builder → brokerage → agent → team
• classify commissions, referral fees, admin fees & bonuses
• correct GST/HST rate for assignment commissions
• validate GST/HST numbers for subcontracted team members
• reconstruct ITC proof for:
– marketing
– signage
– staging
– photography
– lead generation
– client dinners/transport
– office lease & desk fees
• prepare CPA-certified audit binder with full transaction logic
• negotiate reduction/waiver of penalties and interest
• correct historical GST/HST returns if necessary

Learning insight: Assignment commission audits require contract + tax law + documentation alignment.

Common CRA Findings in Assignment Commission Audits

• GST/HST not charged on assignment commissions
• referral fees incorrectly treated as exempt
• double commissions misreported
• wrong GST/HST rate (out-of-province error)
• ITCs denied due to missing invoices
• builder commission rebates treated incorrectly
• team splits lacking proper GST/HST
• related-party commissions treated at incorrect FMV
• corporate assignment buyers misclassified

Learning insight: Most CRA reassessments come from documentation gaps, not revenue errors.

Real-World Results

• A real estate team avoided a $243,000 GST reassessment after Mackisen CPA reconstructed assignment fee flows and corrected improper tax treatment.
• A condo assignment broker reversed a $118,000 ITC denial when we validated marketing and staging invoices.
• A franchise brokerage eliminated penalties after we demonstrated correct GST treatment on team splits and referral fees.
• An agent handling multiple pre-construction assignments cleared CRA audit findings when we reconciled brokerage statements with GST returns.

Learning insight: CRA backs down when the commission file is clean, logical, and CPA-defended.

SEO Optimization & Educational Value

Primary keywords: GST/HST assignment commission audit, CRA realtor audit, Mackisen CPA Montreal, assignment sale GST audit
Secondary keywords: realtor team split GST, referral fee GST rules, builder commission audit, real estate broker GST Canada

Learning insight: Assignment commissions are one of the most misinterpreted GST areas — ideal for SEO and authority positioning.

Why Mackisen CPA Montreal

With 35+ years defending realtors, assignment brokers, and real estate teams, Mackisen CPA Montreal is Québec’s #1 authority on GST/HST assignment commission audits.
We understand builder agreements, team structures, assignment taxation, ITCs, and CRA audit methodology better than anyone.

Learning insight: Assignment audits succeed when contracts, commissions, and GST logic align — our specialty.

Call to Action

If CRA is auditing your assignment commissions, referral fees, team splits, or GST reporting, contact Mackisen CPA Montreal immediately:

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

Learning Conclusion:

A CRA GST/HST Real Estate Assignment Commission Audit tests commission taxability, assignment fee treatment, provincial GST rules, and ITC documentation.
Mackisen CPA Montreal ensures your commissions are fully defended and your audit outcome fully protected.