CRA Real Estate Reassessment 2025 — Protect Your Property Investments, Stop CRA Penalties, and Restore Your Tax Exemptions

In 2025, CRA’s Real Estate Reassessment Program is aggressively auditing Canadians who sold, flipped, or rented property. Using land registry data, banking transactions, and MLS listings, CRA now automatically flags any property sale or renovation that might indicate speculation. Even honest homeowners and long-term investors are being reassessed as “business flippers,” losing their Principal Residence Exemption (PRE) and facing 100% taxable income reclassification. At Mackisen CPA Auditors Montreal, we defend property owners, investors, and developers against CRA’s misinterpretation of real estate transactions. Our CPA auditors and tax lawyers prove investment intent, restore exemptions, and eliminate penalties. We don’t let CRA turn smart real estate strategy into an audit nightmare — we protect your wealth, your records, and your rights.

Legal and Regulatory Framework

Income Tax Act (Canada)

• Section 9(1): Defines business income vs. capital gains — central to real estate audits.

• Section 40(2)(b): Determines capital gains on property disposition.

• Section 54: Governs the Principal Residence Exemption (PRE).

• Section 163(2): Imposes gross negligence penalties for alleged misreporting — Mackisen eliminates these with evidence.

• Section 220(3.1): Permits CRA to cancel penalties and interest through the Taxpayer Relief Program.
  Excise Tax Act (Canada)

• Section 191: Requires GST/HST on new or substantially renovated housing, which Mackisen ensures is properly claimed or exempted.
  Tax Administration Act (Quebec)
  Revenu Québec enforces QST and provincial income audits on real estate transactions. Mackisen handles both federal and provincial cases seamlessly.

Key Court Decisions

Bédard v. The Queen (2022): CRA cannot reclassify property sales as business income without proof of speculative intent.
Thibault v. The Queen (2022): Genuine personal use qualifies for the Principal Residence Exemption even if sale occurs shortly after purchase.
Guindon v. Canada (2015): Honest misunderstanding of tax rules cannot justify gross negligence penalties.
Friesen v. The Queen (1995 SCC): CRA must respect taxpayers’ stated investment purpose supported by documentation.
These rulings confirm that CRA real estate reassessments can be overturned through documentation, valuation, and legal advocacy.

Why CRA Targets Real Estate Transactions

Real estate is one of CRA’s most profitable audit sectors. Common 2025 triggers include:

• Sale within one year of purchase.

• Multiple property sales or flips.

• Failure to report sale or PRE on Schedule 3.

• Rental or Airbnb income not declared.

• Renovations classified as “commercial” activity.
  CRA assumes profit motive — Mackisen proves personal or investment intent.

Mackisen’s Real Estate Audit Defense Strategy

1. Case Review: Analyze CRA’s reassessment and identify misclassified or duplicated transactions.

2. Intent Documentation: Gather purchase records, correspondence, and mortgage documents to prove investment purpose.

3. Valuation Analysis: Provide professional appraisals and occupancy evidence to validate Principal Residence Exemption.

4. Formal Objection Filing: Submit a comprehensive Notice of Objection to suspend collection and dispute CRA’s findings.

5. Penalty & Interest Relief: Apply under Section 220(3.1) to cancel financial penalties and restore compliance standing.
   Our defense transforms CRA’s assumptions into legally supported evidence of your true real estate strategy.

Real Client Experience

A Montreal investor was reassessed $386,000 after CRA claimed “house flipping.” Mackisen proved long-term capital investment and secured full exemption restoration.
A Quebec homeowner was penalized for “unreported property sale.” Mackisen provided proof of personal use and CRA cancelled all penalties.

Common Questions

Can CRA tax my home sale? Only if it’s deemed business income — Mackisen proves personal or capital intent to prevent this.
Do I have to report every home sale? Yes, even exempt ones — Mackisen ensures proper reporting to maintain exemption rights.
Can CRA audit properties sold years ago? Yes, up to ten years — Mackisen enforces limitation periods and stops retroactive reassessments.
Can CRA charge GST on my renovation project? Only if it qualifies as commercial — Mackisen documents and defends residential intent.

Why Mackisen

At Mackisen CPA Auditors Montreal, we are Canada’s top defenders of real estate investors and property owners. Our integrated team of CPAs and tax lawyers ensures that your real estate income, capital gains, and exemptions stand legally unchallenged. We act fast, document deeply, and negotiate decisively — because your home and investments deserve full protection. When CRA audits your real estate, Mackisen audits their judgment.
Call Mackisen CPA Auditors Montreal today for your 2025 Real Estate Reassessment Defense Consultation. The first meeting is free, and your protection starts immediately.