Canada Revenue Agency Enhances Audit Activity on Real Estate Transactions

Canada Revenue Agency Enhances Audit Activity on Real Estate Transactions


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For those involved in Real Estate investing, the CRA is enhancing it’s audit activity around real estate transactions, presumably because any audit activity it takes on is a money maker.  Some of you may have already received this questionnaire.  The intention of this is to disclose information that that CRA may use to warrant (from their perspective) an audit of your real estate transactions. If you are unsure about the CRA’s enhanced audit Canada procedures and need expert assistance then we at Burgess Kilpatrick are here to help you out.

In 2019, the CRA assessed $171 million more in additional gross taxes related to real estate than in the prior year, according to a CRA news release that you can find here

The project is aimed at promoters, developers, and taxpayers involved in multiple real estate transactions.  The CRA believes that a substantial amount of taxpayers are transacting real estate deals that constitute an income transaction rather than a capital one, and wants to collect the additional taxes previously unpaid.

To assist taxpayers, a Real estate questionnaire that the department will use to determine qualified audit candidates has been released for public use and can be referenced below.

The questionnaire is designed to get information for taxing purposes only, and there is the risk that the CRA may use this information to assert a tax position on your transactions inconsistent with a fair and equitable application of the Income Tax Act.

If you have such a questionnaire and need help is answering the questions that assert your position, give me a call. At Burgess Kilpatrick, we will guide you with the CRA in audit questionnaire issues and will save you from hefty tax payment.


CRA Real Estate Activities Questions (1)


If you have any questions or want to speak further about your joint venture, real estate or tax issues, contact Nicholas Kilpatrick at


Nicholas Kilpatrick is a partner with the accounting firm of  Burgess Kilpatrick and specializes in tax structuring and business development for his small and medium business sized clients.  Please visit our website at or on Facebook at Kilpatrick for more information on our firm.



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