Tenants Will Now Have to Pay 18% GST on Rent?
A tenant, who is registered under the GST, is now required to pay GST at 18 per cent for renting a residential property
Earlier, only commercial properties like offices or retail spaces given on rent or lease attracted GST. There was no GST on rent or lease of residential properties by corporate houses or individuals. A tenant, who is registered under the GST, is required to pay Goods and Services Tax at 18 per cent for renting a residential property, according to the new GST rules which are effective from 18th July.
The 18 per cent tax on rent paid is only applicable to tenants registered under the GST. Under the GST law, registered persons include corporate owners. The GST registration is mandatory when a person carrying out business or profession reaches an annual turnover of more than ? 20 lakh in a financial year.
The owner of the residential property is not liable to pay the GST. Also if any common salaried person has taken a residential house or flat on rent or lease, they do not have to pay GST.
In simpler words, the new changes, which are implemented will only impact the companies and professionals who have taken residential properties on rent or lease
