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Guide · GST Rates

GST on Real Estate Agent & Broker —
18% on Commission

The correct GST rate on brokerage and commission, when a property agent must register, what Input Tax Credit you can claim, and how TDS under Section 194H interacts with your GST invoice.

TaxClue Editorial Desk Updated 18 August 2026 5 min read 16 FAQs answered
Updated for FY 2026-27 GST Expert Reviewed Broker & Property Agent
Quick Answer

A real estate agent or broker charges 18% GST on commission and brokerage (SAC 9972) — the tax is on the commission amount, not the property value. Registration is mandatory once annual commission income crosses ₹20 lakh. Agents on 18% can claim Input Tax Credit on business expenses. The property sale itself (a completed flat or plot) carries no GST; TDS on commission is 5% under Section 194H.

Broker commission 18%
Property management fee 18%
Ready-to-move flat sale Nil
Under-construction (builder) 5%
At a glance

Real Estate Services — GST Rate Table

Every common real-estate scenario, separating the agent's service GST from the builder's property GST, with ITC eligibility. See the full GST rate chart for other supplies.

SupplyGST RateITCNotes
Broker / agent commission18%YesOn the commission amount (SAC 9972)
Property management fee18%YesManaging / letting client property
Real estate consultancy / appraisal18%YesFee-based advisory service
Facility / security management18%YesSAC 9982 / 9985
Under-construction flat — affordable1%NoBuilder's GST, not the agent's
Under-construction flat — other5%NoBuilder's GST (no ITC to buyer)
Ready-to-move / resale flat saleNil—Immovable property — stamp duty applies
Society maintenance ≤ ₹7,500/monthExempt—Per member threshold
Society maintenance > ₹7,500/month18%YesOn the full amount, if society > ₹20L

Brokerage stays on the 18% slab under the GST 2.0 structure (eff 22 Sep 2025); builder-side rates shown for context. Confirm on the official GST portal before invoicing.

Agent side

When Must a Real Estate Agent Register?

A property agent supplies a service, so GST registration becomes mandatory once aggregate commission/fee turnover crosses:

  • ₹20 lakh/year — most states
  • ₹10 lakh/year — special-category states (Manipur, Mizoram, Nagaland, Tripura, etc.)
  • Any inter-state supply of service can trigger registration regardless of turnover
No composition scheme for agents

Real estate agents cannot opt for the composition scheme — it is closed to most service providers (only restaurants are the notable exception). Below ₹20L you may register voluntarily to claim ITC and invoice B2B clients, but you then charge 18% and file regular returns.

Not sure whether your brokerage income needs a GSTIN?

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Credit rules

ITC a Real Estate Agent Can Claim

Because brokerage is taxed at 18% with ITC, a registered agent can offset the GST paid on genuine business inputs against the GST charged to clients. Review the full ITC rules before claiming.

ExpenseITC?Notes
Property-portal subscriptions (99acres, MagicBricks)Yes18% GST — core business input
Advertising & digital marketingYes18% GST on agency / ad-platform bills
Office rent (commercial)Yes18% GST on a valid tax invoice
Professional fees (CA, lawyer)Yes18% GST — eligible
Internet, telephone, softwareYes18% GST — eligible
Motor car (< 13 seats)NoBlocked under Section 17(5)
Salaries to employees—No GST — not an ITC item

ITC needs a valid tax invoice reflected in your GSTR-2B and use for business.

TaxClue Insight

For a broker, ITC on portal subscriptions and advertising is often the largest credit — these can run into lakhs a year. Reconciling them monthly against GSTR-2B keeps your net 18% GST outflow low and audit-ready.

Worked example

How the Numbers Work — ₹1 Cr Deal

A broker closes a ₹1 crore property sale at 2% commission (₹2,00,000). GST is charged on the commission, and the payer deducts TDS on the base commission.

18% GST on the commission

Property value₹1,00,00,000
Commission @ 2%₹2,00,000
GST @ 18%₹36,000
Client pays broker₹2,36,000

Net after TDS u/s 194H

Commission (base)₹2,00,000
GST (separate)₹36,000
Less TDS @ 5% on base−₹10,000
Net received₹2,26,000

GST is charged on the ₹2,00,000 commission only — never on the ₹1 crore property value. TDS is deducted on the base commission, not on the GST, when GST is shown as a separate line.

Client / builderAgrees commission on the deal
→
Agent invoiceCommission + 18% GST, separate lines
→
PayerDeducts 5% TDS on base, pays GST
→
AgentFiles GST return, claims TDS in ITR
Income-tax side

TDS on Commission — Section 194H

TDS and GST are separate obligations. The party paying the commission deducts TDS at 5% under Section 194H when commission/brokerage to one person exceeds ₹15,000 in a year.

  • Rate: 5% TDS on the base commission (excluding GST, if GST is shown separately on the invoice).
  • Threshold: deduction applies once yearly commission to the same person exceeds ₹15,000.
  • Credit: the payer issues Form 16A; the agent claims the TDS in their income-tax return.
  • Non-residents: commission to an NRI agent attracts TDS under Section 195 / the applicable DTAA rate.

You must charge 18% GST if

  • Your annual commission/fee income exceeds ₹20 lakh
  • You make any inter-state supply of service
  • You have voluntarily registered for GST

You need not register if

  • Commission income stays below ₹20 lakh (₹10L special states)
  • You supply only within your state
  • You are content to forgo ITC on your inputs

Want your brokerage GST invoices and 194H TDS reconciled correctly?

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Government sourcesRates & notifications: gst.gov.in · CBIC rate finder: cbic-gst.gov.in · Real estate services: SAC 9972 @ 18% (fee/commission basis) · TDS on commission: Section 194H, Income-tax Act, 1961
People also ask

Frequently Asked Questions

Rates & Slabs
What is the GST rate on real estate agent and broker services?
Real estate agent and broker services are taxed at 18% GST under SAC 9972. The tax is charged on the commission or brokerage amount, not on the property value. This 18% rate applies to property brokers, agents facilitating sales or rentals, and consultancy — and it stayed on the 18% slab under the GST 2.0 structure effective 22 September 2025.
Is GST charged on the commission or the property value?
Only on the commission. GST at 18% applies to the broker's fee, never to the property's sale price. For example, on a ₹1 crore deal with a 2% commission of ₹2,00,000, the 18% GST is ₹36,000 — calculated on the ₹2,00,000 commission, so the client pays ₹2,36,000 to the broker.
What is the SAC code for real estate agent services?
Real estate services provided on a fee, commission or contract basis fall under SAC 9972, taxed at 18%. This covers property brokerage, real estate consultancy, property management and appraisal when supplied as a service, as distinct from the sale of the property itself.
Did GST 2.0 change the rate on brokerage?
No. The GST 2.0 rationalisation (effective 22 September 2025) restructured many goods into a two-slab 5%/18% system, but fee-based real estate services such as brokerage, commission and consultancy remained on the 18% slab under SAC 9972. Builder-side under-construction rates (1% affordable, 5% other) also continued, while ready-to-move sales stay outside GST.
Registration
Do real estate agents need to register for GST?
Registration is mandatory once a real estate agent's annual commission or brokerage turnover exceeds ₹20 lakh (₹10 lakh in special-category states). Below that threshold registration is not compulsory, but an agent may register voluntarily to claim Input Tax Credit and invoice B2B clients. Any inter-state supply of service can also require registration regardless of turnover.
Can a real estate agent opt for the composition scheme?
No. The composition scheme is not available to real estate agents — it is closed to most service providers, with restaurants being the notable exception. An agent who registers therefore charges the regular 18% and files standard GST returns rather than a flat composition rate.
Is GST payable on broker commission under reverse charge?
No. Real estate broker commission is not on the reverse-charge list under Section 9(3), so it is taxed under forward charge — the registered agent charges 18% on the invoice and pays it to the government. If the agent is unregistered and below the threshold, no GST arises on the commission.
ITC
Can a real estate agent claim ITC on business expenses?
Yes. A registered agent charging 18% GST can claim Input Tax Credit on genuine business inputs — property-portal subscriptions (99acres, MagicBricks), advertising, office rent, internet, professional fees, laptops and software. Motor cars under 13 seats are blocked under Section 17(5). The ITC offsets the 18% GST charged to clients, reducing the net tax payable.
Is ITC available on property-portal and advertising spend?
Yes. Subscriptions to property portals and payments to advertising or digital-marketing agencies carry 18% GST and are core business inputs for a broker, so the credit is eligible provided you hold a valid tax invoice reflected in your GSTR-2B. These are often a broker's largest ITC items.
Property vs Service
Is there GST on the sale of a ready-to-move flat?
No. The sale of a completed, ready-to-move flat or a plot is a transfer of immovable property and is outside GST — it attracts stamp duty and registration charges instead. The agent's 18% commission GST still applies separately, even though the property transaction itself carries no GST.
What GST does the builder charge on an under-construction flat?
The builder charges 1% GST (without ITC) on affordable-housing under-construction units and 5% (without ITC) on other under-construction residential units. This is the builder's GST on the property, entirely separate from the agent's 18% commission GST, and the buyer cannot claim ITC on it.
How is GST on property management services charged?
Property management — managing, letting or maintaining a client's property — is a service taxed at 18% on the management fee (SAC 9972). This applies whether the underlying property is residential or commercial; the underlying rent follows its own rules. Facility, security and housekeeping services are also 18%.
Society & Maintenance
Is GST payable on society maintenance charges?
Housing-society maintenance is exempt up to ₹7,500 per month per member. If monthly maintenance exceeds ₹7,500 per member and the society's aggregate turnover is above ₹20 lakh, 18% GST applies on the full amount, not just the excess. The society can claim ITC on its inputs in that case.
TDS
What is the TDS on real estate agent commission?
TDS is deducted at 5% under Section 194H when commission or brokerage to one person exceeds ₹15,000 in a financial year. The payer deducts on the base commission, deposits it, and issues Form 16A; the agent claims the credit in their income-tax return. TDS and GST are separate — one is income-tax, the other is a value-added tax on the service.
Is TDS under 194H deducted on the GST component too?
No. TDS under Section 194H is deducted only on the base commission, not on the GST, provided the invoice shows GST as a separate line item. On a ₹2,00,000 commission plus ₹36,000 GST, TDS at 5% is ₹10,000 (5% of ₹2,00,000), so the broker receives ₹2,00,000 − ₹10,000 + ₹36,000 = ₹2,26,000.
What TDS applies to a commission paid to an NRI agent?
Commission paid to a non-resident agent is not covered by Section 194H; instead TDS is deducted under Section 195 at the rate specified in the Act or the applicable DTAA, which is commonly around 10–20% depending on the nature of income and the treaty. Professional advice is recommended for cross-border commission payments.
If you would rather not do it yourself

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