The government’s decision to impose 18 per cent GST on rental houses, to be paid by tenants whose business/ professional income fall under the ambit of GST, will put additional burden on the taxpayers, said experts.

Pankaj Kapoor, founder and MD of Liases Foras, a non-broking real estate research company, said, “This will indeed have an adverse impact on the rental housing scheme as well as investment in rental housing by corporates and business houses, and especially those senior level management staff who earn over Rs 20 lakh per annum and come under the ambit of GST. As such the preceding rental yields are low which are in the range of 2 to 2.5 per cent in most parts of the country including Mumbai, as compared to 5 to 5.5 per cent in developed countries, which suggests that there is low demand for rental homes as on today. In other words, rentals have not appreciated in relation to the capital value of the property across India for the past few years.”