GST on Rent — Rates, Exemptions & ITC Rules (2026)
GST on rent depends on the type of property and who the tenant is. Commercial rent attracts 18% GST. Residential rent is generally exempt — but there are important exceptions introduced after July 2022.
Quick Reference
Rate
18%
SAC Code
997212
ITC
Allowed (commercial only)
RCM
Yes (residential to registered tenant)
Threshold
₹20 lakh
GST Rate
18%
SAC 997212
Commercial Rent (Office/Shop/Warehouse)
18% GST applies on rent for any commercial property — office space, shops, godowns, factories, and warehouses. The landlord must charge GST if their aggregate turnover exceeds ₹20 lakh (₹10 lakh in special category states).
Residential Rent — Key Rule (post-July 2022)
Since 18 July 2022, GST under Reverse Charge Mechanism (RCM) applies when a registered business rents a residential property for use as a residence. The tenant (not the landlord) must pay 18% GST directly to the government. If the tenant is an individual renting for personal residence, no GST applies.
Residential Rent — Exempt Cases
No GST applies if: (1) the tenant is an unregistered individual, (2) the property is used as a residence by a registered person but is their own property, or (3) the landlord's annual turnover is below ₹20 lakh.
Input Tax Credit on Rent
ITC on commercial rent is fully allowed if the property is used for business purposes. ITC on residential rent paid under RCM is blocked under Section 17(5) — you cannot claim it back.
GST Registration Requirement
A landlord earning rent must register for GST if annual rental income exceeds ₹20 lakh. If they rent multiple properties, all rental income is aggregated for the threshold calculation.
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Yes, if the landlord's total rental + business income exceeds ₹20 lakh annually. They must register for GST and charge 18% on your office rent. If below the threshold, no GST is charged.
Yes. If you are GST-registered and use the office exclusively for business, the 18% GST you pay on commercial rent is fully creditable as ITC against your GST liability.
Yes, under RCM since July 2022. If your company is GST-registered and rents a residential flat (even for an employee's residence), the company must pay 18% GST under RCM. ITC on this is blocked.
