CRA GST/HST Residential Complex Audit — Montreal CPA Firm Near You: Defending Residential Use, Builder Status, and Tax Exemptions

A CRA GST/HST Residential Complex Audit focuses on whether a property truly qualifies as a residential complex under the Excise Tax Act — a classification that determines whether the property is taxable, exempt, self-assessed, or eligible for rebates.
These audits are typically triggered when CRA suspects mixed use, short-term rental activity, builder classification, incorrect exemption claims, or missing self-assessment on new or renovated residential property.

Mackisen CPA Montreal specializes in defending residential-complex audits by clarifying use, intention, occupancy, and legal classification, ensuring your property is properly defended from reassessment.

Legal Foundation

Excise Tax Act s.123(1) — defines “residential complex,” “builder,” “substantial renovation,” and “commercial activity.”
Excise Tax Act s.165 — GST/HST applies to taxable real property unless exempt.
Excise Tax Act s.191 — self-assessment rules for new residential complexes and change of use.
Schedule V, Part I — exemptions for long-term residential use.
Case Law:
• Cheema v. Canada — beneficial ownership drives GST/HST liability.
• Tarnowe — occupancy must be proven for exemption and rebate eligibility.

Learning insight: CRA challenges residential-complex status when use, intention, or occupancy appear unclear.

Why CRA Audits Residential Complexes

CRA flags properties when it detects:
• Airbnb or short-term rentals (taxable) inside a “residential complex”
• quick resale indicating business activity
• substantial renovations possibly creating a “new residential complex”
• GST/HST not self-assessed on conversion
• rental rebate claims with no occupancy
• incorrect exemption applied to a partial commercial-use property
• multi-unit ownership with mixed tax treatment
• properties held by corporations suspected of commercial activity

Learning insight: Residential-complex status can disappear instantly if CRA believes business activity is involved.

CRA Residential Complex Audit Process

1. CRA requests:
   – leases & tenant proof
   – occupancy documentation
   – Airbnb/booking logs
   – utility bills & insurance
   – renovation receipts
   – zoning documents
   – closing documents & mortgage records

2. CRA reconstructs the use timeline.

3. CRA determines whether the property is:
   • a residential complex
   • a new residential complex (taxable)
   • a mixed-use property
   • a commercial asset

4. CRA recalculates any GST/HST owing or rebates disallowed.

5. CRA issues a proposed reassessment.

6. Mackisen CPA builds a detailed rebuttal.

Learning insight: “Residential complex” is a legal classification — CRA requires proof, not assumptions.

Mackisen CPA’s Residential Complex Defense Strategy

• prove long-term residential use with leases, utility usage, tenant records
• defend against improper builder classification
• document principal residence occupancy
• separate taxable short-term rentals from exempt long-term use
• calculate and correct GST/HST self-assessment (if applicable)
• prepare zoning-based and usage-based classification analysis
• reconstruct substantial renovation details
• prepare CPA-certified documentation binders tailored to CRA

Learning insight: CRA reclassifies properties incorrectly when documentation is weak — we make it strong.

Common CRA Findings in Residential Complex Audits

• property deemed “new residential complex” → GST owing on fair market value
• rental rebate denied due to lack of tenant occupancy
• Airbnb activity triggers loss of exemption
• substantial renovations treated as a rebuild → GST triggered
• mixed-use property misclassified as fully residential
• failure to self-assess GST on change of use
• builder classification imposed due to quick resale
• incomplete paperwork for leases or renovations

Learning insight: Every finding stems from documentation gaps, not client intent.

Real-World Results

• A triplex owner avoided a $312,000 reassessment when Mackisen CPA proved each unit had continuous long-term tenants.
• A landlord retained a $38,000 rental rebate after we demonstrated the unit was occupied long-term, despite a short vacancy.
• A homeowner avoided “new residential complex” classification by proving renovations did not meet the “substantial renovation” threshold.
• A client using partial Airbnb cleared the audit after we isolated taxable vs exempt usage.

Learning insight: CRA backs down when your file is airtight and logically structured.

SEO Optimization and Educational Value

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Secondary keywords: rental rebate audit, substantial renovation audit, Airbnb GST audit, residential exemption GST, CRA property reassessment

Learning insight: High-quality residential complex audit guidance improves both client trust and search visibility.

Why Mackisen CPA Montreal

With 35+ years in GST/HST real estate audit defense, Mackisen CPA Montreal is Québec’s leading expert on residential complex classification. Our bilingual team understands every detail: rebates, exemptions, renovations, builder rules, change-of-use, and mixed-use allocations — and we defend your file with precision.

Learning insight: Residential complex audits test classification + use + intention. We prove all three.

Call to Action

If CRA is challenging your residential complex status, rental eligibility, substantial renovations, or GST exemption, get expert help immediately.
Contact Mackisen CPA Montreal for full audit defense and documentation reconstruction.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA GST/HST Residential Complex Audit tests whether your property truly qualifies as a residential complex under the law. Mackisen CPA Montreal ensures the classification is proven, documented, and defended — protecting your property and your financial outcome.