New GST on Rent: When and Where It Applies
- 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.
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.
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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% |
Type of Rental
GST Applicable
New GST Rate (After 22 Sep 2025)
Type of Rental
GST Applicable
New GST Rate (After 22 Sep 2025)
Type of Rental
GST Applicable
New GST Rate (After 22 Sep 2025)
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 , 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
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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
- 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 .
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 , provided:
- They are registered under GST
- The rented premises are used for business
- The GST invoice is correctly issued
