CRA GST/HST Rental Property Audit — Montreal CPA Firm Near You: Defending Long-Term Rentals, Change-of-Use, and Rental Rebates

A CRA GST/HST Rental Property Audit focuses on whether your residential or commercial rental property was correctly classified for GST/HST purposes, whether any self-assessment was required, and whether rental rebates or ITCs were claimed properly.
These audits often involve long-term rental properties, Airbnb/short-term rentals, mixed-use properties, rental conversions, and New Residential Rental Property Rebate (NRRPR) claims.

Mackisen CPA Montreal specializes in defending rental audits by proving long-term rental intention, documenting tenant occupancy, correcting GST/HST change-of-use calculations, and rebuilding rebate files to satisfy CRA’s strict review standards.

Rental properties are among the most heavily audited areas because GST/HST on real estate is frequently misunderstood.

Legal Foundation

Excise Tax Act s.191 — GST/HST self-assessment rules on change of use (personal → rental or rental → personal).
Excise Tax Act s.256.2 — New Residential Rental Property Rebate (NRRPR).
Excise Tax Act s.123(1) — definitions of “residential complex,” “builder,” and “commercial activity.”
Case law:
• Cheema v. Canada — beneficial ownership determines GST liability.
• Tarnowe — rebate eligibility requires clear occupancy or rental proof.

Learning insight: Rental GST/HST treatment depends entirely on intent, use, and evidence, not what you “believed.”

Why CRA Audits Rental Properties

CRA initiates rental audits when it detects:
• rental rebates claimed with no active tenants
• properties partially used for Airbnb (short-term rental = taxable)
• quick changes from rental to resale (suspected flipping)
• GST/HST not self-assessed on conversion to long-term rental
• mismatched addresses for landlords, tenants, leases, utilities
• lack of proof of long-term rental intention
• rent paid in cash or undocumented tenancy
• principal residence vs rental inconsistencies
• claiming ITCs for exempt residential property (not allowed)

Learning insight: CRA assumes a rental rebate is invalid unless you prove the rental was genuine and long-term.

CRA Rental Property Audit Process

1. CRA requests:
   – leases, rental ads, bank deposits, e-transfer receipts
   – tenant IDs + contact info
   – hydro/utility usage
   – insurance policies
   – mortgage statements
   – Airbnb/VRBO transaction logs (if applicable)
   – property tax bills & municipal classification

2. CRA reconstructs your intention timeline: when rented, to whom, and for how long.

3. CRA evaluates GST/HST liability (taxable vs exempt).

4. CRA verifies if self-assessment under s.191 was required.

5. CRA assesses eligibility for the NRRPR (New Residential Rental Property Rebate).

6. CRA issues a proposed assessment; Mackisen CPA responds with evidence.

Learning insight: The CRA’s decision is based on your evidence, not your explanation.

Mackisen CPA’s Rental Property Audit Defense Strategy

• prove long-term rental intention with ads, leases, correspondence, and rental applications
• document actual occupancy with utilities, insurance, tenant proof
• separate taxable short-term rental activity (Airbnb) from exempt long-term rental
• reconstruct cash-rental deposits and bank reconciliation
• calculate correct GST/HST self-assessment on conversion (if applicable)
• defend or reconstruct New Residential Rental Property Rebate (NRRPR) claims
• challenge incorrect builder classification
• prepare full CPA-certified rental audit files
• dispute CRA’s assumptions with a fact-based legal narrative

Learning insight: CRA rental reclassifications are often wrong — your CPA must correct the narrative with proof.

Common CRA Findings in Rental Audits

• rebate denied due to missing leases or tenant occupancy proof
• GST/HST not self-assessed when converting new build to rental
• CRA treats rental as “business flipping” → large GST/HST bill
• Airbnb activity causes rebate denial
• ITCs denied due to exempt residential use
• personal use mixed with rental use → rebate clawback
• lease signed but no proof property was ever occupied
• incorrect GST treatment on mixed-use buildings

Learning insight: Most negative results occur because paperwork wasn’t kept, not because the rental wasn’t legitimate.

Real-World Results

• A landlord kept a $32,000 rental rebate after we proved legitimate long-term rental intention with archived ads, emails, and tenant proof.
• An investor avoided a $76,000 GST reassessment when we demonstrated that Airbnb activity was temporary and corrected change-of-use filings.
• A new-build landlord reversed a $110,000 assessment after we documented early-tenant occupancy and long-term rental purpose.
• A mixed-use property owner cleared CRA’s findings by properly allocating commercial vs residential components.

Learning insight: Fact-based documentation always beats CRA assumptions.

SEO Optimization and Educational Value

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Learning insight: Clear rental documentation protects both audit outcomes and online visibility.

Why Mackisen CPA Montreal

With 35+ years in GST/HST real-estate defense, Mackisen CPA Montreal is Québec’s leading expert for rental property audits. Our bilingual CPAs understand CRA’s rules for residential exemptions, short-term rentals, builder classifications, and rebate eligibility, and we build audit files that stand up to scrutiny.

Learning insight: GST/HST rental audits require proof of use, proof of intent, and proof of compliance — we deliver all three.

Call to Action

If CRA is auditing your rental property, rental rebate, or Airbnb classification, act immediately.
Contact Mackisen CPA Montreal for full rental audit defense and documentation reconstruction.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA GST/HST Rental Property Audit tests whether your rental was genuine, long-term, and properly documented. Mackisen CPA Montreal ensures your evidence is complete, consistent, and fully defensible — protecting your rebate and tax position.