CRA GST/HST Real Estate Audit — Montreal CPA Firm Near You: Defending New Builds, Assignments, Flips, Rentals, and Rebates

A CRA GST/HST Real Estate Audit is one of the most complex and high-risk audits in Canada. CRA aggressively audits new home builds, condo flips, assignment sales, rental conversions, builder status, land purchases, and rebate claims (New Residential Rebate, Rental Rebate).
These audits can result in six-figure reassessments if GST/HST was not charged, self-assessed, or rebated correctly.

Mackisen CPA Montreal specializes in defending real estate audits by reviewing contracts, analyzing builder vs. investor status, reconstructing GST/HST logic for property use, and preparing complete, CPA-certified documentation to prevent reassessments and penalties.

Legal Foundation

Excise Tax Act s.165 — GST/HST liability on taxable real property.
Excise Tax Act s.191 — self-assessment rules on new residential property.
Excise Tax Act s.193 — rebate eligibility rules.
Excise Tax Act s.123(1) — defines “builder,” “substantial renovation,” and “residential complex.”
Case law: Cheema v. Canada — assignment contracts and true beneficial ownership determine GST/HST liability.

Learning insight: Real estate GST/HST depends on intended use + builder status + beneficial ownership + documentation.

Why CRA Audits Real Estate Transactions

CRA targets real estate because the GST/HST rules are complicated and frequently misunderstood. They audit when they detect:
• repeated condo flips (suspected business activity)
• assignment sales WITHOUT GST/HST charged
• principal residence claimed where property was actually flipped or rented
• large rebates claimed by individuals with no occupancy evidence
• homes “built to live in” but quickly sold (builder reclassification)
• rental properties incorrectly treated as exempt
• substantial renovations incorrectly treated as non-taxable
• missing self-assessment on change-of-use (rental → personal or vice versa)
• mismatch between land registry, CRA filings, and rebate applications

Learning insight: CRA assumes non-compliance unless documentation proves intent and use.

CRA Real Estate Audit Process

1. CRA requests: purchase agreements, sale contracts, assignment contracts, invoices, building permits, occupancy proof, rental ads, leases, mortgage documents, bank records, and closing statements.

2. CRA determines if you are a builder based on frequency, intention, marketing, and renovations.

3. CRA analyzes use of property (personal, rental, flip, assignment).

4. CRA tests GST/HST liability: upfront, embedded, self-assessed, or exempt.

5. CRA audits rebates for eligibility and occupancy requirements.

6. CRA issues a proposed reassessment; Mackisen CPA responds with full defense.

Learning insight: CRA often misinterprets intentions — your CPA must correct the narrative with facts.

Mackisen CPA’s Real Estate GST/HST Audit Defense Strategy

• prove intention: principal residence vs. investment vs. business
• reconstruct timeline of purchase, renovation, marketing, and sale
• analyze whether you legally qualify as a builder or non-builder
• perform GST/HST liability calculations for:
– new builds
– substantial renovations
– assignments
– rentals
– short-term rentals (Airbnb)
• defend New Housing Rebates with occupancy evidence
• defend Rental Rebates with lease agreements and proof of long-term rental intention
• correct misclassified transactions and file amended GST/HST returns
• prepare CPA-certified audit binders that satisfy CRA’s technical requirements

Learning insight: Most real estate GST/HST problems arise from incorrect classification, not fraud.

Common CRA Findings in Real Estate Audits

• condo flippers deemed “builders” → forced to charge GST on sale
• denied rebates due to lack of occupancy (utility bills missing)
• assignment sellers failing to charge GST/HST
• substantial renovations reclassified as taxable new builds
• rental conversions requiring self-assessment that was never done
• “principal residence” claimed but evidence points to business activity
• misapplied GST/HST on land sales
• mixed-use properties incorrectly reported

Learning insight: Every real estate file must tell a clear story of intention, use, and GST/HST logic.

Real-World Results

• A Montreal investor avoided a $228,000 reassessment when Mackisen CPA proved the condo was a genuine principal residence, not inventory.
• A builder reversed a $410,000 GST/HST adjustment after we reconstructed self-assessment calculations and demonstrated proper rental-conversion treatment.
• An assignment seller cleared a $94,000 audit when we showed GST was already embedded in the builder price.
• A landlord kept a $32,000 rental rebate after we documented long-term rental intention with leases, ads, and bank records.

Learning insight: CRA backs down when your documentation is more organized than theirs.

SEO Optimization and Educational Value

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Learning insight: Real estate is the #1 audited GST/HST area — strong documentation is your only shield.

Why Mackisen CPA Montreal

With more than 35 years of real estate audit-defense experience, Mackisen CPA Montreal is Québec’s leading authority on GST/HST real estate audits. Our bilingual CPAs specialize in audits involving new homes, assignments, flip activity, rentals, rebates, and builder classification. We defend your property transactions with precision.

Learning insight: GST/HST on real estate is unforgiving — but fully defensible with proper CPA representation.

Call to Action

If CRA is auditing your real estate transaction, rebate, or builder status, act immediately.
Contact Mackisen CPA Montreal for expert real estate GST audit defense.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA GST/HST Real Estate Audit tests intention, use, documentation, and legal classification. Mackisen CPA Montreal ensures every element of your file is defensible — protecting your refunds, your credits, and your financial future.