CRA Builder Audits

Facing a CRA audit after selling or renovating a property? A Toronto tax lawyer at Kirshen Tax Law can help you respond effectively.

The Canada Revenue Agency (CRA) is aggressively auditing individuals who build, substantially renovate, or flip residential properties. Even if you’ve only sold one home, the CRA may label you a “builder” and assess tens or even hundreds of thousands of dollars in GST/HST plus penalties and interest.

At Kirshen Tax Law, we help homeowners, contractors, and investors fight back against unfair assessments. Based in Toronto and serving clients across Canada, we bring experience, insight, and strategy to every real estate audit dispute.

Why Is the CRA Auditing You?

CRA audits are often triggered when:

• You sold a newly built or substantially renovated home;
• The property was only briefly occupied or not at all;
• You bought and sold multiple properties in a short period;
• You or your company has real estate or construction experience;
• You claimed a GST/HST new housing rebate;
• The purchaser claimed a GST/HST new housing rebate; or
• The CRA suspects the home was not your primary residence.

You don’t have to be a developer to get audited. One flip, one renovation, or even a brief occupancy can lead to a major reassessment.

What Is a “Builder” Under the Law?

Under the Excise Tax Act, you can be considered a “builder” even if you:

• Constructed or substantially renovated only one home;
• Sold a home you lived in for a short time;
• Intended to sell the property for profit; or
• Hired contractors to perform the work.

If you meet the definition of a builder, the CRA may:

• Charge GST/HST on the sale or on a deemed self-supply;
• Impose penalties, including gross negligence penalties (up to 25%); and
• Add interest going back several years.

How We Help During the Audit

At Kirshen Tax Law, we guide you through every step of the builder audit process. We’ll:

• Respond to CRA audit questionnaires and attend interviews;
• Push back on the CRA’s attempt to label you a builder when it isn’t justified;
• Argue for any/all exemptions that may apply; and
• Prepare and submit audit representations tailored to your best legal position, with support from a Toronto tax lawyer who understands the CRA’s builder criteria.

Whether you’re facing an assessment, reassessment or want to assess risk before the CRA contacts you, we can help protect your position and build your defence.

What Happens After the Audit?

If CRA believes GST/HST should have been charged, they’ll issue an assessment or reassessment. This could include:

• Tax on a deemed self-supply (even if the property wasn’t sold);
• GST/HST that CRA says should have been charged on the sale;
• Interest backdated to the time of the transaction; and
• Penalties, including gross negligence if they believe you knew better.

You have 90 days from the assessment or reassessment to file a notice of objection. We can prepare and submit that objection to challenge the CRA’s findings and protect your rights.

Why Work With Kirshen Tax Law?

We’re a tax law firm focused on CRA disputes. If you’re facing a builder audit, you need someone who knows both the rules and the tactics CRA uses.

We’ve helped clients respond to GST/HST assessments, self-supply audits, and change-of-use issues tied to new home construction or renovation projects. We know the builder rules inside and out and how to push back when CRA overreaches.

From start to finish, you’ll work directly with an experienced Toronto tax lawyer who knows how to protect you.

Proven Results: Builder Audits

We’ve helped clients respond to CRA builder audits across Canada by avoiding the “builder” designation, overturning CRA’s position during the audit or objection process, and eliminating GST/HST reassessments and penalties in full or in part.

See examples of our successful builder audit results here.

Book a Free Consultation

Don’t let a CRA builder audit put your finances at risk. Whether your audit has just started, is ongoing, or you’ve already been assessed or reassessed, we’ll help you respond with confidence. Book a free consultation with a Toronto tax lawyer who can help you respond effectively and protect your rights.