ARTICLE · 13 FEBRUARY 2024

Navigating Builder Audits

Rosen & Associates

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Builder audits conducted by the Canada Revenue Agency (CRA) are a significant concern for taxpayers involved in real estate transactions, particularly those engaged in construction or substantial renovation projects.

CanadaReal Estate and Construction

Michelle Kosarnia

Navigating Builder Audits

Builder audits conducted by the Canada Revenue Agency (CRA) are a significant concern for taxpayers involved in real estate transactions, particularly those engaged in construction or substantial renovation projects. These audits scrutinize whether taxpayers qualify as "builders" under Canadian tax laws, potentially leading to assessments for unremitted GST/HST and/or reassessments for income tax.

What is a 'Builder' Audit?

A 'Builder' audit typically commences with the Canada Revenue Agency ("CRA") issuing an initial audit questionnaire inquiring into the circumstances around the sale(s) of one or more 'subject properties' during a specified timeframe. Through this process, the CRA aims to ascertain whether:

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