GST on Renting of Immovable Property: Commercial, Residential & RCM (2025)
Updated: 3 June 2026 — GST Council & Notification No. 05/2022-CT(R)
Commercial property rent attracts 18% GST (SAC 9972) charged by the landlord. Residential property rented to a GST-registered business triggers 18% GST under RCM (tenant pays, from July 2022). Pure residential rent for personal living remains fully exempt. ITC is available to business tenants on commercial rent.
18%
GST on commercial property rent (SAC 9972)
Also 18% RCM on residential rent to registered businesses (w.e.f. 18 July 2022). Residential-for-living: Exempt.
Also 18% RCM on residential rent to registered businesses (w.e.f. 18 July 2022). Residential-for-living: Exempt.
GST on Property Rent: Complete Rate & RCM Table
| Property Type | Tenant / Use | GST Rate | RCM? | ITC for Tenant? |
|---|---|---|---|---|
| Commercial (office, shop, warehouse) | Any business | 18% | No — landlord charges GST (FCM) | Yes, if used for taxable supplies |
| Residential flat / house | Individual for personal living | Exempt | No | N/A |
| Residential flat / house | GST-registered company / LLP / individual for business | 18% | Yes — tenant pays under RCM | Yes, if for business use |
| Residential flat / house | Unregistered individual / business | Exempt | No | N/A |
| Mixed-use property (partly commercial) | Business | 18% on commercial portion | FCM on commercial; RCM on residential to registered | Proportionate ITC |
| Co-working / serviced office | Any business | 18% | No (FCM by co-working operator) | Yes |
| Shopping mall unit / retail space | Retailer / brand | 18% | No (FCM by mall owner) | Yes |
| Agricultural land (bare land) | Any | Exempt | No | N/A |
Residential Property RCM: What Changed in July 2022?
Before 18 July 2022, renting of residential property was entirely exempt from GST. The 47th GST Council meeting changed this for one specific scenario: when a GST-registered entity (company, LLP, partnership firm, or any registered person) takes a residential property on rent for business use, 18% GST applies under RCM.
Key clarifications issued by CBIC on RCM for residential rent:
- The landlord does not need to be GST-registered for RCM to apply — the registered tenant pays the GST.
- A proprietor renting their own residential flat for personal use is not subject to RCM even if they are GST-registered for another business.
- A company renting a flat as a guest house or to accommodate employees: RCM applies at 18%.
- ITC on such RCM paid is available to the company if the accommodation is for employees working on taxable supply projects.
GST Registration Threshold for Landlords
A landlord earning rental income from immovable property must register for GST when aggregate turnover (including rental income) exceeds ₹20 lakh per year (₹10 lakh in special category states). Once registered, 18% GST must be collected from commercial tenants. For residential tenants, the landlord need not charge GST (it is either exempt or RCM on the tenant).
| Landlord Situation | GST Registration Required? | Who Pays GST? |
|---|---|---|
| Only commercial rent, total > ₹20L/year | Yes — mandatory | Landlord (FCM) |
| Only commercial rent, total < ₹20L/year | Voluntary | N/A (below threshold) |
| Only residential rent to individuals | No — exempt supply | N/A (exempt) |
| Residential rent to registered businesses | No (RCM applies) | Registered tenant pays under RCM |
| Mixed commercial + residential | Yes if total > ₹20L | Landlord on commercial; Tenant on residential (RCM) |
Frequently Asked Questions
Does a registered business renting a residential flat pay GST under RCM?
Yes. Since 18 July 2022, if a GST-registered person (company, LLP, or any registered entity) rents a residential property for business use (e.g., employee accommodation, office-cum-residence), the tenant must pay 18% GST under Reverse Charge Mechanism (RCM). The landlord does not charge GST in this case. If the tenant is an unregistered individual renting for personal residential use, GST is exempt.
Can a business claim ITC on GST paid as RCM on residential property rent?
Yes, a GST-registered business paying GST under RCM on residential property rent can claim ITC of the GST paid, provided the premises are used for business purposes (taxable supply). ITC is not available if the property is used for personal accommodation of partners/directors or for exempt supplies. The ITC can offset output GST liability in the same return period.
Is GST applicable on shopping mall or commercial office rent?
Yes. Rent of commercial properties — including shops, offices, warehouses, factories, and shopping malls — attracts 18% GST under SAC 9972. The landlord must charge 18% GST if registered (or if turnover from rental exceeds ₹20 lakh). The tenant (if registered) can claim full ITC on this GST. There is no RCM on commercial property rent from a registered landlord.
What is the GST treatment on sub-letting a rented property?
Sub-letting is treated as a fresh supply of renting service. If an entity rents a commercial property and sub-lets it, both the original rent and the sub-let rent are separately taxable at 18% GST under SAC 9972. The sub-letter can claim ITC on GST paid to the original landlord against its own output GST on sub-letting income, provided both transactions involve commercial properties.
Is GST applicable on co-working space or serviced office fees?
Yes. Co-working space fees and serviced office charges attract 18% GST under SAC 9972 (renting of immovable property) or SAC 9983 (support services), depending on the nature of the contract. Pure space rental: 18% SAC 9972. Bundled services (internet, reception, pantry): 18% SAC 9983. Businesses paying for co-working memberships can claim ITC on the 18% GST paid.
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