Nova Scotia Provincial Budget Tax Updates 2025-2026
Overview
On February 18, 2025, Nova-Scotia’s government has presented its 2025-2026 budget “Unlocking Our Potential”. This comprehensive summary highlights the key changes that will influence the Nova Scotia’s tax environment in the coming years.
Personal Income Tax Measures
The income tax rates for the 2025 taxation year, based on your taxable income, are as follow:
| Taxable income | Rate |
| $30,507 or less | 8.79 % |
| More than $30,507 but not more than $ 61,015 | 14.95 % |
| More than $61,015 but not more than $95,883 | 16.67 % |
| More than $95,883 but not more than $154,650 | 17.50 % |
| More than $154,650 | 21.00 % |
The current personal combined income tax rates for top marginal tax rate in 2025 are outlined below:
| Taxable income above $253,414 | Rate |
| Interest/regular income | 54.00% |
| Capital gains | 27.00% |
| Eligible dividends | 41.58% |
| Non‑eligible dividends | 48.27% |
Personal Income Tax Indexation & Enhanced Tax Credits
Starting in 2025, Nova Scotia will index personal income tax brackets and select non-refundable tax credits to inflation (3.1% for 2025). This change ensures that tax thresholds and credits keep pace with rising costs. Indexed credits include:
- The Basic Personal Amount (BPA)
- The Spouse or Common-law partner Amount
- The Amount for an Eligible Dependant
- The Age Amount
- The Amount for Infirm Dependants aged 18 or older
Additionally, starting in 2025, the maximum Basic Personal, Age, Spousal, and Eligible Dependent amounts will be provided to all eligible tax filers, by removing the reduction provision for those with taxable income above $25,000. As a result, all eligible taxpayers will now receive the maximum amounts:
- $11,744 for the BPA, Spousal Amount, and Eligible Dependant Amount
- $5,734 for the Age Amount.
These changes are expected to create an average tax reduction of $300 per person.
Corporate Income Tax Measures
Lower Small Business Tax Rate & Higher Income Threshold
Effective April 1, 2025, Nova Scotia is reducing its small business tax rate from 2.5% to 1.5%, making it one of the most competitive in Canada. Meanwhile, the small business income threshold will increase from $500,000 to $700,000, allowing businesses to benefit from the lower rate on a larger portion of their income.
There are no proposed changes to the general or the manufacturing and processing rates.
The corporate income tax rates for Nova Scotia in 2025 are as follows:
| Prior to April 1, 2025 | After March 31, 2025 | |||
| Provincial tax rate | Federal and provincial combined tax rate | Provincial tax rate | Federal and provincial combined tax rate | |
| Small-business tax rate[1] | 2.50% | 11.50% | 1.50% | 10.50% |
| Manufacturing and processing tax rate | 14.00% | 29.00% | 14.00% | 29.00% |
| General corporate tax rate | 14.00% | 29.00% | 14.00% | 29.00% |
Sales Tax Measures
Harmonized Sales Tax (HST) Reduction
To provide financial relief, Nova Scotia will reduce its provincial portion of the HST from 10% to 9%, lowering the overall HST rate from 15% to 14%, effective April 1, 2025. The reduction is expected to create an average household saving of over $500 per year.
Other Tax Measures
Increasing of the Non-Resident Deed Transfer Tax
To address housing affordability and speculation, the Non-Resident Deed Transfer Tax will increase from 5% to 10%, effective April 1, 2025. This applies to residential property purchases by non-residents unless they move to Nova Scotia within six months of closing. The new rate will apply to sales agreements dated April 1, 2025, or later.
For further information, visit https://beta.novascotia.ca/documents/budget-documents-2025-2026
[1] Applies to the first $700,000 ($500,000 before 2025) of active taxable income of Canadian-Controlled Private Corporations (CCPCs) with taxable capital of less than $10 million and is phased out for CCPCs with taxable capital between $10 million and $50 million.
