Transitional Rules Posted for HST Reduction

Nova Scotians and businesses across Canada can find information online to plan for the permanent reduction of the harmonized sales tax (HST) that will take effect April 1, 2025.

“The HST reduction is one way the government is helping Nova Scotians and addressing affordability. We want to share these rules as early as possible to provide businesses with sufficient lead time to understand the rules and to make system changes,” said John Lohr, Minister of Finance and Treasury Board. “We also want to help consumers plan and ensure they know that we’re taking the steps necessary to fulfill our promise to lower taxes and make the lives of Nova Scotians and workers more affordable.”

Information about the decrease in the HST to 14 per cent from 15 per cent is at: https://www.novascotia.ca/finance/en/home/taxation/tax101/hst/default.aspx.html

Posting this notice online provides people with a general description of the transitional rules for the decrease and to understand which tax rate applies around the April 1 implementation date.

In general, the transitional rule to determine which tax rate applies is based on the earlier of the invoice date or when the transaction is paid. If the transaction is payable before April 1, the HST of 15 per cent applies. If the transaction is payable after April 1, the HST rate of 14 per cent applies. However, there are special situations where the general rule may not apply.

For more information on general transitional rules, people can contact the Canada Revenue Agency’s business enquiries line at 1-800-959-5525 (English service) or 1-800-959-7775 (French service). For more information on the transitional rules for sales of real property, people should contact the Canada Revenue Agency’s technical GST/HST enquiries line at 1-800-959-8287 (English service) or 1-800-959-8296 (French service).

Nova Scotia first announced its intention to decrease the provincial portion of the HST rate on October 23. The government passed a legislative motion on the reduction December 10.

Quick Facts:

• the HST includes the provincial sales tax of 10 per cent and federal goods and services tax (GST) of five per cent; the provincial portion will be reduced to nine per cent
• a one percentage point reduction to the provincial portion of the HST is expected to reduce provincial revenues by about $260.8 million in the 2025-26 fiscal year; $265.5 million in 2026-27; and $272.4 million in 2027-28
• lower income earners who receive the affordable living tax credit will continue to be supported at the same level
• to permanently reduce the HST by one percentage point, the Province must provide notice in writing, make a public announcement and pass a legislative instrument; these steps have been completed
• the final step in reducing the rate is a regulation change by the federal government

Additional Resources:

News release – Nova Scotia Takes Next Step to Permanently Reduce HST: https://news.novascotia.ca/en/2024/12/10/nova-scotia-takes-next-step-permanently-reduce-hst