CRA GST/HST Vacant Land Audit — Montreal CPA Firm Near You: Proving Whether Your Land Sale Is Taxable or Exempt

A CRA GST/HST Vacant Land Audit determines whether the sale of vacant land should be taxable, exempt, or zero-rated under the Excise Tax Act.
Because vacant land rules are highly technical — and often misunderstood — CRA aggressively audits these transactions. One incorrect classification can result in tens or hundreds of thousands of dollars in GST/HST owing.

Mackisen CPA Montreal specializes in defending vacant land audits by analyzing use, zoning, vendor activity, and intention, while reconstructing documentation to prove the correct tax treatment.

Vacant land is one of the most misclassified areas in all GST/HST audits.

Legal Foundation

Excise Tax Act s.165 — GST/HST applies by default to taxable supplies.
Excise Tax Act Schedule V, Part I — exemptions for certain sales of vacant land, especially by individuals.
Excise Tax Act s.123(1) — definitions of “builder,” “commercial activity,” and “residential complex.”
Case law:
• Royal Bank v. Canada — ITC rules require commercial purpose.
• DaSilva v. Canada — vacant land exemption applies only with clear evidence of non-commercial use.

Learning insight: Vacant land is taxable unless an exemption clearly applies — and CRA will force GST/HST unless you prove otherwise.

Why CRA Audits Vacant Land Sales

CRA flags vacant land transactions when it detects:
• sale of vacant land by individuals who may be “builders”
• repeated land transactions (suspected business activity)
• rezoned or subdivided land (implies commercial intention)
• farmland sold by non-farmers
• vacant land used for parking, storage, or business → taxable
• mixed-use land (residential + commercial potential)
• GST/HST not collected at closing
• unclear beneficial ownership documentation

Learning insight: CRA assumes commercial activity when land value rises or when sales occur frequently.

CRA Vacant Land Audit Process

1. CRA requests:
   – deed/land registry records
   – zoning documents
   – municipal letters
   – marketing/MLS listings
   – subdivision or severance applications
   – farm documentation (if applicable)
   – past sales of land or properties
   – use-of-land evidence (photos, leases, ads)

2. CRA determines whether the exemption applies.

3. CRA tests for “builder” or “commercial activity” classification.

4. CRA verifies use of land (personal, recreational, agricultural, commercial).

5. CRA issues a proposed reassessment.

6. Mackisen CPA responds with documentary and legal evidence.

Learning insight: Vacant land audits are fact-driven — the tax outcome depends on the documented history of the land.

Mackisen CPA’s Vacant Land Audit Defense Strategy

• determine correct classification: exempt, taxable, zero-rated, or mixed
• defend exemption under Schedule V if land was:
– personal use only
– not part of a business
– not subdivided or rezoned
• build a full “use of land” narrative with photos, municipal docs, maps, affidavits
• analyze zoning and clarify whether land qualifies as residential, agricultural, or commercial
• challenge improper “builder” designation
• reconstruct missing documentation
• prepare CPA-certified GST/HST calculations
• negotiate or appeal reassessment if CRA’s interpretation is incorrect

Learning insight: CRA often misclassifies vacant land because they lack context — your CPA must supply that context.

Common CRA Findings in Vacant Land Audits

• GST/HST owing because seller deemed a “builder”
• exemption denied due to suspected commercial intention
• rezoned or severed land → considered taxable
• land treated as farmland but no farming evidence
• land treated as personal-use but signs of business activity exist
• GST not charged on taxable land sales
• incorrect ITCs claimed on land purchases
• confusion between mixed-use land portions

Learning insight: CRA denies exemptions quickly — and only reinstates them with solid documentary proof.

Real-World Results

• A landowner avoided a $143,000 GST reassessment after Mackisen CPA proved the land was used exclusively for personal recreation, not business.
• A family avoided GST on the sale of inherited vacant land when we demonstrated it met the Schedule V exemption.
• A farmer maintained the GST exemption on 10 acres after proving actual agricultural use through receipts, logs, and municipal documentation.
• An investor overturned a builder classification by showing no subdivision, rezoning, or development activity.

Learning insight: Vacant land cases are won when the purpose and use are documented clearly.

SEO Optimization and Educational Value

Primary keywords: GST/HST vacant land audit, CRA land sale audit, Mackisen CPA Montreal, exempt land sale GST, GST on vacant land
Secondary keywords: builder classification land, farmland GST exemption, GST/HST real estate audit, CRA Schedule V exemption

Learning insight: Vacant land audits benefit from clear educational content — it builds trust with both CRA and clients.

Why Mackisen CPA Montreal

With 35+ years of GST/HST real-estate audit defense experience, Mackisen CPA Montreal is Québec’s top authority on vacant land taxation, builder classification, and GST/HST exemptions. We understand the nuances of Schedule V, zoning rules, agricultural exemptions, and land-use documentation — and we build defense files that win.

Learning insight: Vacant land audits are legal-and-facts puzzles — we solve both parts.

Call to Action

If CRA is auditing your vacant land sale, exemption claim, or GST/HST treatment, act immediately.
Contact Mackisen CPA Montreal for vacant land audit defense, documentation reconstruction, and GST/HST strategy.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA GST/HST Vacant Land Audit tests use, zoning, intention, and documentation. Mackisen CPA Montreal ensures every requirement is proven — protecting you from unnecessary tax, penalties, and reassessments.