Tax Guide for Property Managers in Quebec: GST/QST Rules, Income Reporting, and Deductible Management Expenses — CPA Firm Near You, Montreal

Introduction

Property managers in Quebec oversee residential and commercial buildings, collect rents, coordinate maintenance, supervise contractors, and manage tenant relations. Because property management services are taxable and involve multiple income streams and expense categories, CRA and Revenu Québec frequently audit this industry. This guide explains how property managers must report income, apply GST/QST correctly, claim deductions, and how a CPA firm near you in Montreal can help reduce audit risk and optimize tax filings.

Legal and Regulatory Framework

Under the Income Tax Act and the Taxation Act of Quebec, property managers must report all income earned from management contracts, leasing commissions, administrative fees, maintenance coordination, markups, and consulting services. Property management services are taxable supplies, meaning GST and QST registration is required once annual taxable revenues exceed the small-supplier threshold. Deductible expenses may include office rent, mileage, software, advertising, subcontractor payments, cellphone costs, bank fees, insurance, home office expenses, licensing fees, and professional training. CRA and Revenu Québec require detailed invoicing, receipts, and documentation of payments to contractors and suppliers.

Key Court Decisions

Courts have ruled that property managers must keep accurate records of maintenance expenses, subcontractor payments, and markups. Judges have denied deductions where taxpayers failed to provide receipts or attempted to deduct personal expenses as business costs. Several rulings highlight that GST/QST must be charged on all management fees and leasing commissions, and that failure to remit these taxes can result in significant penalties. Courts also emphasize that income must be reported in the period it is earned, even if collected later.

Why CRA and Revenu Québec Target Property Managers

Property managers are often audited because of:
• Cash payments to contractors
• Markups on repairs or cleaning
• Mixed personal and business expenses
• Missing invoices or subcontractor receipts
• Inconsistent reporting of management fees
• Failure to charge or remit GST/QST on taxable services

Auditors compare bank deposits, client statements, and expense records to identify discrepancies. They also examine whether property managers improperly claimed rental-related expenses that belong to building owners, not to the management company.

Mackisen Strategy

At Mackisen CPA Montreal, we help property managers set up a complete compliance and accounting system tailored to their operations. We determine GST/QST obligations, implement proper invoicing structures, and reconcile management fees with client statements. We optimize deductions for software, office rent, mileage, subcontractors, and marketing expenses. Our team prepares year-end filings, maintains contractor records, and ensures all documentation aligns with CRA and Revenu Québec requirements. If audited, we defend deductions, reconstruct expense logs, and negotiate reassessment reductions.

Real Client Experience

A Montreal property manager was audited for failing to charge GST/QST on leasing commissions. CRA issued a significant reassessment. We reviewed all contracts, recalculated taxable fees, corrected previous filings, and negotiated a payment arrangement that reduced penalties. In another case, a manager overclaimed mileage and subcontractor payments without receipts; we rebuilt documentation and preserved allowable deductions.

Common Questions

Are property management services taxable?

Yes. GST and QST must be charged once the small-supplier threshold is exceeded.

What expenses can property managers deduct?

Mileage, office rent, software, subcontractor payments, advertising, cellphone, insurance, and professional training.

Do property managers need to keep receipts from contractors?

Yes. Missing receipts and undocumented payments are major audit triggers.

Can property managers deduct building repairs?

No. Repairs belong to the property owner unless clearly part of the manager’s taxable income structure or markup arrangement.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps property managers stay compliant while maximizing deductions. Whether managing a few units or operating a large portfolio, our expert team ensures precision, transparency, and protection from audit risk.