CRA GST/HST Real Estate Commission Audit — Montreal CPA Firm Near You: Defending Realtors, Brokers, Agencies & Commission Structures

A CRA GST/HST Real Estate Commission Audit examines whether real estate brokers, agents, agencies, and franchise offices correctly charged, collected, remitted, and claimed GST/HST on commissions, transaction fees, desk fees, marketing fees, and referral fees.

Because real estate commissions involve high dollar amounts, cross-border buyers, multiple provinces, and complex brokerage structures, CRA aggressively audits the sector.

Mackisen CPA Montreal specializes in defending GST/HST commission audits by reconstructing commission flows, validating ITCs, analyzing place-of-supply rules, and preparing CPA-certified audit binders that eliminate CRA assumptions.

Legal Foundation

Excise Tax Act

• s.165 — GST/HST applies to taxable real estate commissions

• s.221 — brokers must collect and remit GST/HST

• s.169 — ITC documentation requirements

• Schedule IX — place-of-supply rules

• s.123(1) — definitions: “real property,” “agency service,” “consideration”

Case Law

• Royal Bank v. Canada — strict documentary compliance for ITCs

• Century 21 Case — commissions are taxable regardless of property tax status

• Bretton Realty — referral fees are taxable unless specifically exempt

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

Learning insight: All real estate commissions are taxable, even when the underlying property sale itself may be exempt.

Why CRA Audits Real Estate Agents & Brokers

CRA flags real estate professionals when it detects:
• inconsistent GST/HST charged on commissions
• large ITCs claimed for marketing, vehicles, and office expenses
• discrepancies between brokerage payouts and GST filings
• referral fees not taxed
• commissions earned in other provinces (ON, NS, BC) with wrong GST/HST rate
• GST/HST not remitted on desk fees or franchise fees
• team structures (multiple agents) with unclear GST treatment
• foreign buyers/sellers → incorrect zero-rating assumptions
• vehicles claimed 100% for business (high audit trigger)
• agents with high expenses vs low reported commissions

High-risk groups:

• Residential brokers

• Commercial brokers

• Real estate teams

• Franchise offices

• New construction sales teams

• Assignment sale brokers

• Referral networks

• Remax / Century 21 / eXp / Royal LePage teams

Learning insight: CRA assumes commission errors unless documentation proves otherwise.

CRA Real Estate Commission Audit Process

1. CRA requests:
   – commission statements
   – broker statements / franchise fee reports
   – agent contracts & team agreements
   – invoices & proof of payment
   – referral fee documentation
   – marketing expenses (ads, staging, photography)
   – vehicle logs
   – lease agreements (office / desk fees)
   – GST/HST filings & ITC worksheets

2. CRA tests:
   • GST/HST correctly charged on commissions
   • place-of-supply rules applied (client location & property location)
   • referral fees taxed properly
   • ITCs supported (invoices + payment proof)
   • team payouts treated correctly
   • franchise fees/desk fees remitted with GST/HST
   • advertising/lead-generation platforms classified correctly
   • mixed-use vehicle expenses properly allocated

3. CRA issues Proposed Audit Adjustment.

4. Mackisen CPA provides a full legal-tax defense.

Learning insight: CRA cross-matches brokerage payouts with agent GST/HST filings — mismatches trigger reassessments.

Mackisen CPA’s Real Estate Audit Defense Strategy

• rebuild commission flow (seller → brokerage → agent/team)
• verify GST/HST on commissions, desk fees & franchise deductions
• classify referral fees, team fees & transaction fees
• reconstruct ITC documentation for:
– marketing
– MLS fees
– signage
– staging
– lockboxes
– photography
– car expenses
– software (CRM, lead-gen)
• correct place-of-supply for out-of-province transactions
• prepare CPA-certified audit binder with full reconciliation
• negotiate penalty removal for clerical errors
• restructure tax reporting if team/contract changes occurred

Learning insight: Real estate audits are won when you prove the commission structure + expense logic + documentation are solid.

Common CRA Findings in Real Estate Commission Audits

• GST/HST not charged or undercharged on commissions
• referral fees incorrectly treated as exempt
• missing documentation for marketing ITCs
• personal vehicle use included in ITCs
• brokerage desk fees unreported for GST purposes
• franchise fees missing GST/HST
• out-of-province properties incorrectly taxed
• foreign clients misinterpreted as zero-rated
• team fee structures lacking proper GST treatment

Learning insight: CRA’s #1 issue is incorrect classification of taxable agency services.

Real-World Results

• A real estate team avoided a $310,000 GST reassessment after Mackisen CPA rebuilt commission flow and corrected place-of-supply logic.
• A commercial broker reversed a $180,000 ITC denial after we reconstructed vehicle logs and advertisement invoices.
• A franchise office eliminated penalties when we proved proper GST on desk & franchise fees.
• A top-producing agent cleared CRA findings after we reconciled payouts with GST returns and corrected referral fee treatment.

Learning insight: CRA backs down when the brokerage file is organized, documented, and mathematically consistent.

SEO Optimization & Educational Value

Primary keywords: GST/HST real estate commission audit, CRA realtor audit, Mackisen CPA Montreal, realtor GST audit
Secondary keywords: referral fee GST rules, franchise fee GST audit, real estate agent GST/HST filing, broker audit Canada

Learning insight: Real estate GST audits are massively searched — strong content positions Mackisen as the top choice for brokers.

Why Mackisen CPA Montreal

With 35+ years defending realtors, brokers, agencies, and franchise offices, Mackisen CPA Montreal is Québec’s #1 authority in GST/HST real-estate commission audits.
We understand commission structures, referral fees, team splits, franchise models, and CRA’s audit methodology.

Learning insight: Realtors win audits when their documentation, commission statements, and ITC logic are undeniable — we deliver that.

Call to Action

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

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

Learning Conclusion:

A CRA GST/HST Real Estate Commission Audit examines commission taxability, referral fees, ITCs, vehicle expenses, provincial rules, and documentation quality.
Mackisen CPA Montreal ensures your file is airtight, audit-ready, and fully defended from costly reassessments.