The dynamics of renting residential property under GST has changed with effect from July 18, 2022
MUMBAI, July 21 (The CONNECT) - The imposition of an 18% GST on rentals of residential premises has come as a rude shock for the realty industry and buyers and tenants.
The dynamics of renting residential property under GST has changed with effect from July 18, 2022.
On the basis of notification, a residential dwelling rented to a person registered under GST would attract a tax of 18%, as it would be treated as a supply of service. This is surely a major setback for the business of rental housing in India, the industry says.
Dr. Sachin Chopda, Managing Director, Pushpam Group said, the decision will curb the rising demand for rental business across the real estate industry. In recent years, the rent has been an important source of income for many, therefore the current regime is going to impact the sentiments of the homebuyers for the period to come. The Government should soon intervene and provide a few measures that shall encourage the end-users to continue their investments, he said.
Echoing similar sentiments, Jitesh Lalwani - President, Homesync Real Estate Advisory said, the introduction of 18% GST on residential rentals will have a major impact on the homebuyers sentiments. The decision will also have a severe effect hampering the demand for rental real estate, he pointed out.
Rental businesses have become one of the major sources of income for many people and with the new rule in GST, the residential rental market will get impacted, said Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory.