Nova Scotia HST Rate Decrease – Questions and Answers on Transitional Rules for Housing and Other Real Property Situated in Nova Scotia

GST/HST Notices - Notice 343
March 2025

Except as otherwise noted, all statutory references in this publication are to the provisions of the Excise Tax Act (ETA). The information in this publication does not replace the law found in the ETA and its regulations.

If this information does not completely address your particular situation, you may wish to refer to the ETA or relevant regulation, or call GST/HST Rulings at 1‑800‑959‑8287 for additional information. If you require certainty with respect to any particular GST/HST matter, you may request a ruling. GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, explains how to obtain a ruling or an interpretation and lists the GST/HST rulings centres.

If you are located in Quebec and wish to request a ruling related to the GST/HST, please call Revenu Québec at 1‑800‑567‑4692. You may also visit the Revenu Québec website at revenuquebec.ca to obtain general information.

For listed financial institutions that are selected listed financial institutions (SLFIs) for GST/HST or Quebec sales tax (QST) purposes or both, whether or not they are located in Quebec, the CRA administers the GST/HST and the QST. If you wish to make a technical GST/HST or QST enquiry related to SLFIs, please call 1‑855‑666‑5166.

GST/HST rates

Reference in this publication is made to supplies that are subject to the GST or the HST. The GST/HST rates are those that were in effect at the time of publishing. For the list of all applicable GST/HST rates (current and historic), go to GST/HST calculator (and rates).

If you are uncertain as to whether a supply is made in a participating province, refer to GST/HST Memorandum 3-3-2, Place of Supply in a Province – Overview.

Table of Contents

• Residential real property
  • Application of the HST to the sale of new or substantially renovated housing
  • Application of the HST to owner-built new or substantially renovated rental housing
  • Additional questions
• Non-residential real property
  • Sales of non-residential real property
  • Leases of non-residential real property
• Progress payments
• Holdbacks
• Deposits

Residential real property

Application of the HST to the sale of new or substantially renovated housing

1. What are the transitional rules for the HST rate decrease that apply to a sale of a newly constructed or substantially renovated residential complex in Nova Scotia?

Generally, the HST at 14% applies to a builder's taxable supply by way of sale of a newly constructed or substantially renovated residential complex where both ownership and possession of the complex are transferred to the purchaser on or after April 1, 2025. If either ownership or possession is transferred to the purchaser before April 1, 2025, the HST at 15% applies. This general rule applies to taxable sales of all housing types, including residential condominium units, mobile homes, and floating homes.

2. A builder and a purchaser enter into an agreement of purchase and sale in February 2025 for a newly constructed house in Nova Scotia. The agreement provides that ownership and possession of the house will transfer to the purchaser on May 14, 2025. What rate of the HST applies to the sale?

Since both ownership and possession of the house transfer to the purchaser on or after April 1, 2025, the HST at 14% applies to the sale.

3. When does the HST at 15% apply to a sale of a newly constructed or substantially renovated residential complex in Nova Scotia?

Generally, the HST at 15% applies to a builder's taxable supply by way of sale of a newly constructed or substantially renovated residential complex where either ownership or possession of the complex is transferred to the purchaser before April 1, 2025.

4. A builder and a purchaser enter into an agreement of purchase and sale on July 3, 2024, for a newly constructed house in Nova Scotia. The agreement provides that ownership and possession of the house will transfer to the purchaser in March 2025. What rate of the HST applies to the sale?

The HST at 15% applies to the sale as ownership or possession (in this case, both) of the house transfers to the purchaser before April 1, 2025.

5. I entered into an agreement of purchase and sale with a builder for a newly constructed house in Nova Scotia on December 5, 2024, after the rate decrease was announced by the Province of Nova Scotia. In accordance with the agreement, I take ownership and possession of the house in March 2025. Will the HST at 14% apply to the sale?

No. If ownership or possession (or both) of the house transfers to you before April 1, 2025, the HST at 15% applies to the sale of the house, regardless of when the purchase and sale agreement was entered into.

6. I entered into a written agreement of purchase and sale in December 2024 for a newly constructed residential condominium unit in Nova Scotia. In accordance with the agreement, I take possession of the unit in March 2025 but ownership will only be transferred after April 1, 2025, following the registration of the condominium complex. What rate of the HST applies to the sale?

The HST at 15% applies to the sale as possession of the residential condominium unit transfers to you before April 1, 2025.

Application of the HST to owner-built new or substantially renovated rental housing

7. What is a self-supply of rental housing?

For GST/HST purposes, a builder of newly constructed or substantially renovated rental housing, including single unit residential complexes, residential condominium units, and multiple unit residential complexes (for example, traditional apartment buildings) or additions thereto, is considered to have sold and repurchased (self-supplied) the housing if they either:

• make a supply by way of lease of the complex or condominium unit for use by an individual as a place of residence
• in the case of a multiple unit residential complex or addition thereto, make a supply by way of lease of a unit in the complex or addition for use by an individual as a place of residence

A self-supply generally occurs at the later of the time construction or substantial renovation of a residential complex is substantially completed and the time possession or use of the complex is given under a lease to an individual who is the first to occupy it as a place of residence. In the case of a multiple unit residential complex or an addition thereto, a self-supply occurs at the later of the time construction or substantial renovation of the complex or addition is substantially completed and the time possession or use of a unit in the complex or addition is given to an individual who is the first to occupy the unit in the complex or addition as a place of residence.

The builder is considered to have paid and collected the GST/HST on the self-supply. The tax is calculated on the fair market value of the unit, complex, or addition, as the case may be, including the building and the land reasonably necessary for the use of the housing as a place of residence for individuals.

For more information on the self-supply of rental housing, refer to Guide RC4052, GST/HST Information for the Home Construction Industry.

8. How does the HST rate decrease apply to a self-supply of rental housing in Nova Scotia?

If a self-supply occurs before April 1, 2025, the builder is considered to have paid and collected the HST at 15% on the self-supply.

If a self-supply occurs on or after April 1, 2025, the builder is considered to have paid and collected the HST at 14% on the self-supply.

The HST (at 15% or 14%) is calculated on the fair market value of the housing (building and related land) at the time of the self-supply.

9. I am the builder of an apartment building in Nova Scotia. Construction of the building is substantially completed in March 2025. Under a lease, possession of a unit in the building is given to an individual on April 1, 2025. The individual is the first to occupy a unit in the building as a place of residence. Do I account for the HST at 15% or 14% on the self-supply?

You are considered to have paid and collected the HST at 14% on the self-supply of the apartment building. The self-supply occurs at the later of the time construction of the apartment building is substantially completed and the time possession or use of a unit in the apartment building is first given to an individual as a place of residence. In this case, the self-supply occurs on April 1, 2025, at which time the HST at 14% applies. The HST is calculated on the fair market value of the apartment building (that is, building and land) at that time.

10. I am the builder of a duplex in Nova Scotia. On March 1, 2025, under a lease agreement, I give possession of one of the units in the duplex to an individual who is the first to occupy a unit in the duplex as a place of residence. Construction of the duplex is substantially completed on March 15, 2025. On May 1, 2025, under a lease, I give possession of the other unit in the duplex to an individual who occupies it as a place of residence. Do I account for the HST at 15% or 14% on the self-supply?

You are considered to have paid and collected the HST at 15% on the self-supply of the entire duplex (that is, building and land). The self-supply occurs on March 15, 2025 (that is, the later of the time construction of the duplex is substantially completed and the time possession of a unit is first given to an individual for use as a place of residence). As such, the HST applies at 15% on the self-supply.

Additional questions

11. Are there any changes to exempt leases or exempt sales of residential real property?

There are no changes to the application of the HST where the lease or sale of real property is exempt. Long-term residential rents are exempt from the HST. Generally, the sale by an individual of their previously occupied house is also exempt and the individual is not required to charge or collect the HST.

12. I am a builder and I am registered for GST/HST purposes. I paid the HST at 15% on lumber that I purchased to build new houses in March 2025. I also paid the HST at 14% on lumber purchased in April 2025. What can I claim as input tax credits (ITCs)?

Subject to the normal ITC rules, you can claim an ITC for the HST at the rate that was paid or became payable on the purchase of lumber and other construction materials that you use to construct new housing. Therefore, you are eligible for an ITC of the 15% HST paid on the purchases of lumber made in March 2025 and an ITC of the 14% HST paid on the purchases of lumber made in April 2025. 

Non-residential real property

Sales of non-residential real property

13. What are the transitional rules for the HST rate decrease that apply to taxable sales of non-residential real property in Nova Scotia?

The HST at 14% applies to a taxable supply of real property by way of sale where both ownership and possession of the property are transferred to the purchaser on or after April 1, 2025.

Where either ownership or possession (or both) of the real property transfers to the purchaser before April 1, 2025, the HST at 15% applies to the sale.

The HST does not apply to exempt sales of real property, such as personal use vacant land sold by an individual.

14. A person that is registered for the GST/HST purchases a commercial building in Nova Scotia that is fully leased to retail tenants. The person enters into the written agreement of purchase and sale in January 2025. Under the agreement, ownership and possession transfer to the person in May 2025. What rate of the HST applies to the person's purchase of the building?

Since both ownership and possession of the commercial building transfer on or after April 1, 2025, the person is required to account for the HST at 14% on the purchase. If the building is to be used primarily in the person's commercial activities, the person must include the amount of the HST payable on its purchase of the building on its GST/HST return. Otherwise, the person must report the HST payable on Form GST60, GST/HST Return for Purchase of Real Property or Carbon Emission Allowances.

15. A GST/HST registrant constructs and sells commercial properties in Nova Scotia in the course of its commercial activities. The registrant purchases construction inputs on March 24, 2025, and April 2, 2025, and pays the HST at 15% and 14%, respectively. What can the registrant claim as ITCs on its GST/HST return?

Generally, the registrant can claim ITCs on its GST/HST return to recover the HST paid or payable (at 15% or 14%, as the case may be) on operating expenses and on most purchases of construction inputs used to construct the commercial properties, subject to the normal ITC rules. As such, the registrant would be eligible to claim an ITC of the 15% HST paid on the purchases of construction inputs made on March 24, 2025, and an ITC of the 14% HST paid on the purchases of construction inputs made on April 2, 2025.

16. I am purchasing vacant land from a developer. Under the written agreement of purchase and sale, I take possession in March 2025. However, title does not transfer to me until April 5, 2025. What rate of the HST applies to the sale?

The HST at 15% applies to the sale as possession of the land transfers to you before April 1, 2025.

17. I entered into a written agreement of purchase and sale in February 2025 for the taxable sale of commercial real property in Nova Scotia. Under the agreement, ownership and possession of the property do not transfer until April 15, 2025. What rate of the HST applies to the sale?

Since, under the written agreement, both ownership and possession of the commercial real property transfer on or after April 1, 2025, the HST at 14% applies to the sale.

18. I am making a taxable sale of commercial real property in Nova Scotia to a corporation that is registered for GST/HST purposes. Ownership and possession of the property transfer after April 2025. Do I have to collect the HST on the sale?

No. Although the sale is subject to the HST at 14%, the corporation (that is, the recipient) is registered for the GST/HST. As a result, the corporation is required to include the amount of the HST payable on its purchase of the real property on its GST/HST return if the property is to be used primarily in its commercial activities. Otherwise, the corporation is required to report the HST payable on Form GST60.

Leases of non-residential real property

19. What are the transitional rules for the HST rate decrease that apply to taxable leases of non-residential real property in Nova Scotia?

The HST at 15% applies to a taxable lease of non-residential real property for which the HST becomes payable before April 1, 2025.

The HST at 14% generally applies to a taxable lease of non-residential real property for which the HST becomes payable on or after April 1, 2025.

In general, the HST on consideration for a supply is payable on the earlier of the day the consideration is paid and the day the consideration becomes due.

The HST does not apply to exempt leases of real property, such as the lease of real property by a charity.

20. For GST/HST purposes, when does the consideration for a lease, licence, or similar arrangement become due?

For GST/HST purposes, if a supply of property by way of lease is made under a written agreement, consideration becomes due on the day the lessee is required to pay the consideration under the agreement. In this case, the day the supplier issues an invoice for the consideration payable under the written agreement is irrelevant for purposes of determining when the consideration becomes due.

In the case of a supply of property by way of lease, where the supply is not made under a written agreement, consideration, or a part thereof, for the supply becomes due on the earliest of the following days:

• the day the supplier first issues an invoice for the consideration or part
• the date of that invoice
• if there is an undue delay in issuing that invoice, the day the supplier would have issued the invoice

21. For GST/HST purposes, when is consideration viewed as being paid without having become due?

For GST/HST purposes, in the case of a written agreement for a supply made by way of lease, consideration is paid without having become due when the lessee pays the consideration before the lessee is required to pay it under the written agreement.

22. I lease warehouse space in Nova Scotia from a GST/HST registered person and the supply of the space is subject to the HST. The lease payments are due, in advance, on the first day of each month. I pay the lease payments on the same day they become due. Which monthly lease payment is the first payment that is subject to the HST at 14%?

The first lease payment that is subject to the HST at 14% is the lease payment that becomes due and is paid on April 1, 2025. The HST at 14% also applies to all subsequent lease payments.

23. I work in downtown Halifax and I rent a parking space from the operator of a parking lot that is located near my work. The operator of the parking lot is registered for GST/HST purposes. At the beginning of each month, I pay the operator $150 to park on the lot during that month. Does the HST at 14% apply to these payments?

The HST at 14% applies to the payment you make on or after April 1, 2025, and on all subsequent payments for parking.

24. I have a licence to use real property in Nova Scotia for the period of March 15, 2025, to May 15, 2025. The person supplying the licence is registered for the GST/HST and the licence is taxable for GST/HST purposes. The payment for the licence is due and paid on March 31, 2025. What rate of the HST applies to the payment?

The HST at 15% applies as the licence payment becomes due and is paid before April 1, 2025.

Progress payments

A contract between a supplier and a recipient for the construction, renovation, alteration, or repair of real property often requires the recipient to make payments as work on the project progresses. These payments, referred to as progress payments, are not deposits. Usually the payments are for work completed at the time the payment is made or becomes due, although they can also be made in anticipation of work being completed.

Generally, the GST/HST becomes payable on each progress payment on the earlier of the following days:

• the day the purchaser pays the progress payment
• the day the progress payment becomes due

Refer to Guide RC4052 for more information on progress payments.

25. What rate of the HST applies to progress payments made for the construction of real property in Nova Scotia?

The HST at 15% applies to a progress payment made under a contract to construct, renovate, alter, or repair (hereafter referred to as construct) real property where the progress payment becomes due or is paid before April 1, 2025, regardless of when property is delivered or services are performed.

The HST at 14% applies to a progress payment that becomes due or is paid on or after April 1, 2025, regardless of when property is delivered or services are performed.

In each case, the supplier is required to account for the applicable HST (at 15% or 14%, as the case may be) on its GST/HST return for the reporting period in which the tax becomes payable. If eligible, the recipient is entitled to claim a corresponding ITC on its GST/HST return for the reporting period in which the tax becomes payable or is paid without becoming payable.

26. On January 15, 2024, a person enters into a contract to construct a six-storey building in Nova Scotia. Construction begins on July 1, 2024, and is expected to be completed on August 15, 2025. A progress payment is due on April 5, 2025, for the work completed up until the end of March 2025. The payment is made on the date it becomes due. What rate of the HST applies to the progress payment?

The HST at 14% applies since the progress payment becomes due and is paid on or after April 1, 2025.

27. On January 10, 2025, a person enters into a contract to construct a parking garage in Nova Scotia. Construction begins on March 1, 2025, and is expected to be completed on October 1, 2025. A progress payment is due on March 31, 2025, for the work completed up until the end of March 2025. Another progress payment is due on April 30, 2025, for the work completed up until the end of April 2025. All payments are made on the date they become due. What rate of the HST applies to the progress payments?

The HST at 15% applies to the progress payment that is due on March 31, 2025, as the HST becomes payable before April 1, 2025. The HST at 14% applies to the progress payment that is due on April 30, 2025, as it becomes payable after April 1, 2025.

28. On December 13, 2024, a person enters into a contract to construct a house in Nova Scotia. Construction begins on March 1, 2025, and is expected to be completed on September 1, 2025. A progress payment is due on April 1, 2025, for the work completed up until the end of March 2025. The payment is made on March 31, 2025. What rate of the HST applies to the progress payment?

The HST at 15% applies to the progress payment as it was paid before April 1, 2025. 

Holdbacks

In some situations, in accordance with federal or provincial law or a written agreement for the construction of real property, the purchaser may keep a part of a payment as a holdback pending satisfactory completion of the work. The GST/HST on the amount of the holdback becomes payable on the earlier of:

• the day the purchaser pays the contractor the amount of the holdback
• the day the holdback is payable under the written agreement or applicable legislation

The GST/HST is payable on the earlier of the above dates even if the contractor has already issued an invoice for the holdback amount and charged the GST/HST on this amount. However, if the contractor collects an amount as, or on account of, the GST/HST before it becomes payable, the contractor must remit that tax with its return for the reporting period in which the tax was collected.

Refer to Guide RC4052 for more information on holdbacks.

29. How does the HST rate decrease apply to holdbacks for the construction of real property in Nova Scotia?

A holdback in respect of the construction of real property is treated in the same manner as a progress payment.

As a result, holdbacks are subject to the HST at 15% to the extent that the HST on the holdback becomes payable (that is, the earlier of the day the purchaser pays the contractor the amount of the holdback and the day the holdback is payable under the written agreement or applicable legislation) before April 1, 2025.

The HST at 14% applies to a holdback to the extent that the HST on the holdback becomes payable (that is, the earlier of the day the purchaser pays the contractor the amount of the holdback and the day the holdback is payable under the written agreement or applicable legislation) on or after April 1, 2025.

Deposits

Deposits given in respect of a supply are not consideration for a supply unless and until the supplier applies the deposit as consideration for the supply or the deposit is forfeited. Generally, a deposit is an amount, whether refundable or not, given by a recipient as security for the performance of an obligation by the recipient. A deposit is not a prepayment. An indication of whether an amount is a deposit or a prepayment of consideration for a supply may be determined by reference to how the supplier accounts for the receipt of the funds in its books and records. An amount paid to a person as a deposit is generally not recorded in the person's books and records as revenue until such time that the person applies the amount as a payment or the amount is forfeited.

Refer to Guide RC4052 for more information on deposits.

30. I made a deposit before March 2025 for the use of a hotel room in Nova Scotia in April 2025. The hotel applies the deposit as a payment on my account on check out. What rate of the HST applies to my deposit?

The deposit is not applied as consideration for the supply until you check out of the hotel in April 2025. As a result, the HST at 14% applies to the supply calculated on the total amount paid or payable (including the amount of the deposit) for the supply. If the deposit is forfeited in April 2025, the supplier accounts for the HST at 14%, calculated as included in the amount of the deposit.

Further information