--- title: "Rent New GST Rate 2026: 18% Rate on Commercial Rent & Rental" description: "New GST rate on rent in 2026 is 18% on commercial property and office rental income. Apply the correct GST rate automatically with Busy on every invoice." canonical: "https://busy.in/gst-rates/rent/" author: "Hitesh Aggarwal" published: "2025-05-15T07:43:58.000Z" category: "GST Rates" --- - GST is not charged on residential property rent for personal use, but it is 18% for business use if the tenant is GST-registered. - Commercial property rent is always subject to an 18% GST rate. - Landlords must register for GST if their annual rental income exceeds ₹20 lakh, or ₹10 lakh in some states. - Under the Reverse Charge Mechanism, GST-registered tenants must pay GST directly to the government if renting from an unregistered landlord. - Businesses can claim Input Tax Credit on GST paid for rent if the property is used for business and the GST invoice is correct. # New GST on Rent: When and Where It Applies Renting property is common across residential and commercial sectors in India. But when does GST apply to rent? Is there GST on house rent or only for commercial use? In this blog, we’ll break down the **rent hsn code and gst rate** when GST applies, and how it affects both landlords and tenants. ## New GST on House Rent in India GST on rent in India depends on the type of property and its use. Renting property is treated as a supply of service under GST, but not every rental transaction attracts GST. Even after the GST updates effective from 22 Sep 2025, the tax treatment for house rent remains largely unchanged. ## GST on House Rent | Type of Rental | GST Applicable | New GST Rate (After 22 Sep 2025) | | --- | --- | --- | | Residential property rented for personal use | No | Nil | | Residential property rented by a GST-registered business | Yes (RCM) | 18% | | Commercial property rented for business use | Yes | 18% | Note: Residential houses rented for living purposes remain exempt from GST. However, when a GST-registered business rents a residential property, GST becomes payable under the Reverse Charge Mechanism (RCM). Commercial property rentals continue to attract 18% GST under the normal forward charge mechanism. ## **Is Rent Taxable Under GST?** Under [**GST law**](https://busy.in/gst/) , renting out property is considered a supply of service, which can attract GST — but not always. **GST only applies to:** - Commercial properties rented for business or official use - Residential properties rented for commercial purposes - Properties rented to registered businesses Get a Free Trial – [Best GST Accounting Software For Small Business](https://busy.in/accounting-software/gst-accounting/) Live Demo Available Today ## Track Tenant-Wise Rent Payment Outstanding Without Registers Trusted by 6,00,000+ Users 4.6 Google Rating \* No credit card required ## **When Does a Landlord Need to Register for GST?** If the total annual rental income exceeds ₹20 lakh (₹10 lakh in some states), the landlord is required to: - [**Register under GST**](https://busy.in/gst/how-to-register-for-gst-in-india-a-step-by-step-guide/) - Charge 18% GST on rent (where applicable) - Issue tax invoices - File GST returns regularly ## **How to Calculate GST on Rent** GST on rent is calculated on the taxable rental value. **Formula** GST Amount = Rent × GST Rate ÷ 100 Total Payable = Rent + GST ### **Example** Monthly office rent: Rs 50,000 GST rate: 18% GST = 50,000 × 18 ÷ 100 = Rs 9,000 Total rent payable = Rs 59,000 ## **Reverse Charge Mechanism (RCM) on Rent** If a GST-registered business rents a property from an unregistered landlord, GST is payable by the tenant under the [**Reverse Charge** **Mechanism**](https://busy.in/gst/all-about-reverse-charge-mechanism-rcm-under-gst/) . The tenant pays the tax directly to the government. This applies mainly to commercial rent situations, not personal rentals. ## **Input Tax Credit on Rent** Tenants (usually businesses) who pay GST on rent can [**claim Input Tax Credit**](https://busy.in/gst/what-expenses-can-be-claimed-as-itc/) , provided: - They are registered under GST - The rented premises are used for business - The GST invoice is correctly issued ## About the author **Hitesh Aggarwal** As a Chartered Accountant with over 12 years of experience, I am not only skilled in my profession but also passionate about writing. I specialize in producing insightful content on topics like GST, accounts payable, and income tax, confidently delivering valuable information that engages and informs my audience. ## Frequently asked questions ### What is the rent GST rate for commercial property? The standard GST rate on commercial rent is 18%. ### Is GST on house rent applicable for residential tenants? No, if a property is rented solely for residential use, it is exempt from GST. ### Does a landlord have to register under GST? Only if the landlord's total rental income exceeds ₹20 lakh per year across all properties. ### Can a tenant claim GST paid on rent? Yes, if the tenant is a GST-registered business and the rented property is used for business purposes. ### Does RCM apply to residential rent? No. Reverse Charge Mechanism (RCM) applies only to commercial property rented by a GST-registered tenant from an unregistered landlord. ## Related articles - [New GST on Skincare Products: Rate, Branding & Retail Pricing](https://busy.in/gst-rates/skincare-products/) - [New GST on Industrial Machinery: Slabs, ITC & MSME Effect](https://busy.in/gst-rates/industrial-machinery/) - [New GST on Restaurant Meals: Dine-in, Takeaway & Delivery Compared](https://busy.in/gst-rates/restaurant-meals/) - [New GST on Kitchen Utensils: What’s Taxed and What’s Not?](https://busy.in/gst-rates/kitchen-utensils/) - [New GST on Online Education: Rate, Exemptions & EdTech Impact](https://busy.in/gst-rates/online-education/) - [New GST on Packaging Materials: Tax Implication Across Industries](https://busy.in/gst-rates/packaging-materials/) - [New GST on Digital Marketing Services: Tax Rates & Input Credit Explained](https://busy.in/gst-rates/digital-marketing-services/) - [New GST on Pesticides: Rates, Agri-Exemptions & Sector Impact](https://busy.in/gst-rates/pesticides/) - [New GST on Butter: From Dairy to Dining – What You Pay](https://busy.in/gst-rates/butter/) - [GST on Honey: Rate, Applicability & Industry Outlook](https://busy.in/gst-rates/honey/)