GST on let out residential property

Under the Goods and Services Tax (GST) regime, letting out a residential property is considered a supply of services and is subject to GST if the total rental income from all the let-out properties exceeds the threshold limit of Rs. 20 lakhs. However, if the total rental income is less than Rs. 20 lakhs, the landlord is not required to register for GST.

If the landlord is registered under GST, they are required to charge GST on the rental income at the rate of 18%. This means that the landlord can claim input tax credit (ITC) for the GST paid on goods and services used to maintain and furnish the let-out property.

It is important to note that the landlord is not required to charge GST on the security deposit received from the tenant, as it is considered a refundable deposit and not a consideration for the supply of services.

It is also important to note that if the landlord is letting out a commercial property, the rental income is subject to GST irrespective of the threshold limit. The rate of GST on commercial property rental income is also 18%.

FAQs

Here are some frequently asked questions related to GST on let out residential property:

Q: Is GST applicable on the rent of a residential property?

A: GST is applicable on the rent of a residential property if the total rental income from all the let-out properties exceeds the threshold limit of Rs. 20 lakhs.

Q: What is the rate of GST on the rent of a residential property?

A: The rate of GST on the rent of a residential property is 18%.

Q: Can the landlord claim input tax credit (ITC) for the GST paid on goods and services used to maintain and furnish the let-out property?

A: Yes, if the landlord is registered under GST, they can claim input tax credit (ITC) for the GST paid on goods and services used to maintain and furnish the let-out property.

Q: Is GST applicable on the security deposit received from the tenant?

A: No, GST is not applicable on the security deposit received from the tenant, as it is considered a refundable deposit and not a consideration for the supply of services.

Q: Is GST applicable on the rent of a commercial property?

A: Yes, GST is applicable on the rent of a commercial property irrespective of the threshold limit. The rate of GST on commercial property rental income is also 18%.