GST Rate Shake-Up in 2025: In 2025, Canadians are bracing for a sweeping series of changes to the Goods and Services Tax (GST) and Harmonized Sales Tax (HST) systems—perhaps the most significant in over a decade. Whether you’re an everyday shopper, a small business owner, a tax consultant, or someone just trying to stretch their monthly budget, understanding how these updates will impact you is more important than ever.
The combination of tax cuts, credits, exemptions, and federal relief payments all aim to relieve the burden of inflation, promote housing development, and support low- to middle-income Canadians. But these changes also bring complexity. So, let’s break down what’s happening, why it matters, and how to make the most of it.
GST Rate Shake-Up in 2025
| Topic | Details |
|---|---|
| Federal GST Rate | Remains at 5% in 2025 (Canada.ca) |
| Nova Scotia HST Cut | Drops from 15% to 14% effective April 1, 2025 (DMA Inc) |
| $250 GST Relief Payment | One-time payment issued in March 2025 to eligible low-income earners (MitigationGuide) |
| Quarterly GST/HST Credit | Increased payments starting July 2025 (Sohi Law) |
| GST Exemptions | On new residential rental developments (until 2030) (Wikipedia) |
| Temporary GST/HST Holiday | Tax waived on essentials like food, kids’ clothing, and alcohol (Dec 2024 to Feb 2025) (GlobalNews) |
| CRA Resources | Canada Revenue Agency |
While Canada’s GST structure isn’t undergoing a federal overhaul, the changes introduced in 2025 are still profound. From Nova Scotia’s HST rate cut and quarterly credit increases, to targeted exemptions and temporary tax holidays, these shifts are designed to support Canadian households and businesses in a time of economic pressure.
The more you understand these changes, the better equipped you’ll be to budget, invest, and thrive throughout the year. Don’t wait—review your status, update your records, and take full advantage of the tools and support available to you.
What Is the GST and HST in Canada?
The Goods and Services Tax (GST) is a 5% federal tax applied to most goods and services purchased in Canada. Some provinces choose to combine GST with their Provincial Sales Tax (PST) into a single Harmonized Sales Tax (HST). This means residents in certain provinces—like Nova Scotia, New Brunswick, Newfoundland and Labrador, Ontario, and Prince Edward Island—pay a blended rate.
In provinces without a provincial sales tax—such as Alberta and the territories—the only tax charged is the 5% GST. Understanding this distinction is important whether you’re calculating your grocery bill or preparing your business invoices.
The goal behind HST is administrative simplicity, both for the government and businesses. However, rates vary, and that’s where 2025 brings some key developments.
The 5 Big GST/HST Changes in 2025
Let’s look at the biggest changes to Canada’s GST/HST landscape in 2025 and what they mean in real terms.
1. Nova Scotia HST Rate Cut (April 1, 2025)
Starting April 1, 2025, Nova Scotia’s HST rate will drop from 15% to 14%, reducing the provincial portion from 10% to 9%. This change aims to stimulate consumer spending and ease inflation-related pressures.
For a typical $100 purchase, this reduction means you save $1 in taxes. While it may sound small, over the course of a year it adds up—especially for households spending thousands annually on taxable goods and services.
2. One-Time $250 GST Relief Payment
In March 2025, the federal government issued a $250 GST Relief Payment to low- and moderate-income Canadians. To qualify, you needed to:
- File a 2023 tax return
- Earn under $150,000 annually
- Meet citizenship or residency criteria
The payment was automatic for those eligible. It was a one-time attempt to counteract rising prices on essentials like groceries, rent, and transportation.
3. Enhanced GST/HST Credit
Quarterly GST/HST credits are increasing starting in July 2025. This benefit is aimed at helping Canadians offset the cost of GST/HST on everyday expenses.
2025 payment dates:
- January 3
- April 4
- July 4 (increased amount begins)
- October 3
The CRA automatically calculates eligibility based on your annual income and family status. For example, a single person earning under $50,000 may see annual credits ranging from $300 to over $600 depending on dependents.
4. Temporary GST/HST Holiday (Dec 2024 – Feb 2025)
From December 14, 2024, to February 15, 2025, Canadians saw a temporary tax holiday on select items:
- Prepared meals and fast food
- Alcoholic beverages
- Children’s clothing and footwear
- Snacks and non-essential grocery items
Retailers saw a spike in consumer activity, and many businesses promoted these tax-free months heavily. For consumers, this was a seasonal cost-of-living break during one of the most expensive times of the year.
5. GST Waived on New Rental Housing
To address Canada’s rental housing shortage, the federal government announced GST exemptions on newly built residential rental properties until the end of 2030. This includes:
- Apartment complexes
- Affordable housing projects
- Purpose-built student accommodations
This policy is designed to incentivize developers to build more long-term rentals, helping alleviate supply constraints and lower rental costs across major cities.
What Do These Changes Mean for You?
Consumers
- Expect slightly lower prices in Nova Scotia starting in April
- Benefit from increased GST/HST credits and the March $250 payment
- Enjoy seasonal savings during the tax holiday, especially on meals and apparel
These updates aim to increase affordability for individuals and families, especially those in lower-income brackets.
Small Businesses
- Nova Scotia-based businesses need to update point-of-sale (POS) systems to reflect the 14% rate
- Developers in the rental sector should reassess project cost structures considering the GST exemption
- Restaurants, cafes, and retailers can leverage tax holiday periods for promotional campaigns
Real Estate Developers
- Significant cost reductions on GST for new long-term rental developments
- Incentives to prioritize purpose-built rental properties over short-term or condo projects
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Tips to Maximize Your Benefits and Stay Compliant
Whether you’re a business or individual, here’s how to get ahead of the curve in 2025:
File Your Taxes Promptly
Filing by April 30 ensures your eligibility for GST/HST credits and other federal supports like climate action rebates or Canada Child Benefits.
Review CRA Notifications
Stay updated on benefit amounts, new tax relief measures, and application deadlines through your CRA My Account.
Use Accounting Software
Businesses should ensure their tax settings are current and accurate, especially in light of Nova Scotia’s rate change.
Talk to a Tax Expert
A tax professional can help you strategize for 2025, especially if you’re affected by multiple changes, like owning rental property or operating in multiple provinces.
FAQs On GST Rate Shake-Up in 2025
Q1: Will GST go up federally in 2025?
A: No. The GST remains at 5% federally. Only Nova Scotia is reducing its HST from 15% to 14%.
Q2: Is the $250 GST relief payment taxable?
A: No, this payment is tax-free and does not need to be reported as income.
Q3: Can I still receive the March 2025 relief if I missed it?
A: No. It was a one-time automatic payment for those who met eligibility by March. However, you can still benefit from enhanced GST credits.
Q4: Do businesses get rebates for GST-exempt new rental housing?
A: No rebate is necessary. The GST is not charged in the first place, simplifying development costs.
Q5: What happens if I charge the wrong tax rate in Nova Scotia?
A: You could face penalties or have to reimburse customers. Always ensure your systems are updated and staff trained before April 1.
