Learn how GST applies differently to commercial and residential property rent in India, including exemptions, thresholds, and compliance steps.
GST on Commercial Property Rent
If you lease out a commercial property (office, shop, warehouse, factory), GST at 18% applies on the rent you receive. This is mandatory, regardless of your annual turnover.
Key points:
- GST applies from the first rupee of rent
- Lease agreements must mention GST separately
- You must issue invoices (Form GST INV-1) to tenants
- Tenants can claim input tax credit (ITC) if they're GST-registered
- If your total turnover (including rent) crosses ₹40 lakh (₹20 lakh for services, ₹10 lakh for special-category states), GST registration is mandatory
GST on Residential Property Rent: Complete Exemption
Residential property rent is 100% GST-exempt in India, with no exceptions. This applies to:
- Apartment leases
- Individual house rentals
- Residential plots
- Student hostels
- Service apartments rented for residential use
Even if you own multiple residential properties, you pay no GST and don't need to file GST returns for rental income alone.
Mixed-Use Properties: How to Handle
If a property contains both commercial and residential units:
- Apportion rent clearly between commercial and residential sections
- Charge GST only on the commercial portion (18%)
- Residential portion remains exempt
- Document this split in lease deeds and invoices
Registration Thresholds for Landlords
| Category | Threshold for Mandatory Registration |
|---|---|
| Goods supplier | ₹40 lakh turnover |
| Service provider | ₹20 lakh turnover |
| Special states (NE + Uttarakhand, Himachal Pradesh) | ₹10 lakh turnover |
Commercial rent counts toward your service turnover. Once you breach the threshold, you must register within 30 days.
Compliance Checklist
- Issue GST invoices for commercial rent monthly
- File GSTR-3B returns if registered
- Maintain tenant records and agreements
- Keep bank statements showing rent deposits
- Clearly separate commercial and residential income in accounts
Confused about your rent liability? Check your GST compliance status and filing obligations free at gsthelp.in—our calculator clarifies commercial vs. residential property rules instantly.