Is There Any GST Change for Property Renting Business in India? (As of September 2025)

If you’re a landlord, property manager, or someone running PGs/hostels in India, the 56th GST Council Meeting (September 3–4, 2025) made headlines with important tax changes. But does this mean new GST rules for property rentals? Here’s everything you need to know, in simple language, answering every possible question about GST, exemptions, and your responsibilities.

What Changed in GST Rates?

• New Simple GST Structure: From September 22, 2025, India uses just three main GST slabs – 5%, 18%, and 40% (the highest slab only applies to a few luxury/de-merit goods, not rentals).
• Old 12% & 28% Slabs Removed: Earlier GST blocks (12%, 28%) are gone. For rentals, this mostly helps other service industries and clears confusion for property businesses.

GST on Residential Property Rentals

• No GST on Standard Home Rent: If you rent out a flat, house or apartment for someone to live in (family, students, etc), you pay NO GST. This hasn’t changed. Residential rent for actual living is GST-exempt, no matter what you charge.
• Example:
  • You rent out your home to a family.
  • Rent: Doesn’t matter if it’s ₹10,000 or ₹1 lakh per month.
  • GST you pay: Zero!

GST on Commercial Property Rentals

• GST Remains 18%: Shops, offices, warehouses, godowns, co-working spaces, retail outlets, or any rental for business use are still taxed at 18% GST.
• Example:
  • Rent out a shop for ₹50,000/month (₹6 lakh/year)
  • GST to pay: ₹1,08,000 (18% of yearly rent)

Residential Property Used for Business (RCM)

• RCM Means Tenant Pays If Registered: Rent your house/apartment to a company (for business), and GST applies at 18%. But the business/tenant pays this GST under the Reverse Charge Mechanism (RCM), not you as the owner.
• RCM Example:
  • You rent a flat to a GST-registered company for office use.
  • The company pays rent + 18% GST to the government.

PGs, Hostels, and Student Accommodation

• No GST if it’s for living, under Exemption Quotes: If you operate a hostel or PG for students/long stays (more than 90 days, under ₹20,000 per person/month), GST exemption usually applies (unless it’s run as a short-term hotel). Student homes, traditional PGs, and hostels managed for actual living stay GST-free.

• Business Guest Houses or Corporate Hostels: If you run a hostel or PG for short-term stays (less than 90 days), executive/business guests, or rooms over ₹20,000/month, GST applies at 18% (commercial rate.)

Hotels & Short Stays

• Hotel Stays: Room rates up to ₹7,500/night: now 5% GST (down from 12%)
  
• Higher-end hotels (above ₹7,500/night): GST is 18%.
  
• Short-term rentals (Airbnb/Guest Houses): Taxed like hotels based on length of stay and price per night. Check with your platform/operator for details.

GST Registration – Who Must Register?

• You Only Register if: Your total rental income (all properties together, commercial only) is above ₹20 lakh/year (₹10 lakh in special states.)
  
• If you ONLY rent homes/flats for living (not shops/offices/business), and your income is under this, you do not need GST registration.
  
• PG/Hostel owners: Add up all your properties. If some sections are commercial (short stays, premium rooms), those count towards registration threshold.

Quick Lookup Table – GST on Rentals (2025)

Type of Rental	GST Applicable	GST Rate
Residential property (family/student living)	No	0%
Commercial property (shop, office, warehouse)	Yes	18%
Residential rented for business (RCM)	Yes (RCM)	18%
Hostel/PG/Student (long stay, below ₹20k/month)	No	0%
Hostel/PG/Short stay/Exec rooms	Yes	18%
Hotels (rooms ₹7,500/night or less)	Yes	5%
Hotels (rooms above ₹7,500/night)	Yes	18%

Does Anything Change Because of the New GST Rates?

• NO Change in GST Burden: For residential rentals (homes, flats, student hostels for living) – still no GST, so landlords and tenants aren’t affected.
  
• Commercial Rent Still at 18%: Shops, offices, short-term PGs/hostels continue to pay 18% GST, same as before.
• Hotel stays/short-term rooms: Many will pay less GST now (5% up to ₹7,500/night).

• No New Paperwork/Compliance for Home Rentals: Keep renting your homes as before – nothing new to do!

FAQ’s

1. If I rent out my flat to a family, do I pay GST?

No! Residential use means you do NOT charge or pay GST.

2. What if I own a PG/hostel?

If it’s for long-term living (90+ days, under ₹20,000/person/month), GST is NOT charged. If it’s for short-term guests or premium rates, GST may apply at 18%.

3. I rent a shop/office – what GST do I charge?

Always 18%! GST applies to all commercial rentals.

4. I get more than ₹20 lakh per year by renting property. Do I need GST registration?

Yes – but only if it comes from properties where GST applies (shops, offices, short stays). Residential-only rent (for living/students) does NOT require GST registration.

5. What is the new GST rate for short stays/ hotels?

Up to ₹7,500/night = 5%; above = 18%.

6. If I rent my house to a company, who pays GST?

The company pays GST (RCM). You just get rent – you don’t collect GST or register for it.

7. Do I need to do anything different now?

No. If you were GST-exempt before (residential use), you stay exempt. If you were charging GST for shops/offices, that continues at 18%.

Final Word 

For landlords and property managers, the September 2025 changes do NOT increase your GST responsibilities. Residential rentals are GST-free. Commercial rentals and business-use properties stay at 18%. Hotel room GST has dropped for many.

Just keep clear records and double-check your type of property and tenant use (living vs business). If unsure, reach out to your tax advisor or property platform for guidance.

Stay tuned to RentOk and trusted news sources for any future changes – and keep your business running smoothly without new GST worries!