What are the recent changes in GST on renting of residential properties?

  • Recent changes in GST on renting of residential properties in Mumbai Real Estate

There has been a lot of trepidation around the likely impact of the applicability of GST on rent received from residential apartment under the guidelines issued in the recent GST council meeting.

The anxiety seems to be overblown as it covers only a specific circumstance where the tenant is a registered user under the GST law. Even in this specific situation, it will be tax neutral as the tenant will be able to take the Input tax credit if payment of rent can be claimed as a business expense.

The only situation where there will be additional tax burden would be where the tenant is a registered user and may not be able to claim the payment as a business expense. Such a situation may arise where a sole proprietor has rented an apartment and may not be able to claim the rent paid as a business expense.

Hence, we do not see a major financial impact on the residential rental market.

Our team tries to demystify this new GST provision. Make sure you follow Simplease to never miss important developments in Real Estate.

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