Buying a shop or office: zoning, tax, loans and rent

Check the zone before the price. A shop or office in Indore is allowed only where the development plan permits commercial use, and it costs more to keep than a home: higher property tax, a non-domestic power tariff, a separate loan and different GST. Its value rests on the rent it can earn, so do that sum yourself.

Two purchases, not one

You live in a home. Someone else rents a shop. The rules treat the two differently at every step.

Zone first: the plan decides the use

The development plan gives every parcel a use; for Indore, as of September 2026, that is the Indore Development Plan 2021. Read it for the site before the brochure.

• A commercial zone. Shops and offices fit. Then check the building's permission is for that use, and for this unit.
• A house in a residential area. "Mixed use" has hard limits: ground floor only; 50 per cent of the ground coverage or 75 square metres, whichever is less; parking inside the plot.
• Which road. Shops are allowed only on the mixed-use roads the plan lists. A shorter list of shops and professional offices may also sit on other roads 12 metres or wider.
• A flat in group housing. An office, never a shop, and only the consulting room of a doctor, lawyer, architect or chartered accountant, limited to 25 per cent of the flat or 25 square metres.

The shop in a residential lane

A common pitch in a colony is a house whose front room has become a shop. Under the mixed-use rules, no non-residential use is allowed until a revised building plan is approved and the charges are paid. Ask to see both. IMC also taxes a home used for business at the non-residential rate.

Running costs: tax, power and maintenance

Property tax. IMC charges on annual letting value, per square foot, by zone and use. For an RCC building in 2025–26, in rupees per sq ft a year:

The tax is then 6 to 10 per cent of that letting value, by slab.

Electricity. Shops and offices are billed on the non-domestic tariff, LV-2.2: 680 to 830 paise a unit for loads up to 10 kW, plus a fixed charge for each kW. A home pays 471 to 724 paise a unit.

Maintenance. A complex's common power, lifts, security and cleaning are shared, and your share is due even when the unit stands empty.

The loan and the GST: get both answers in writing

The loan is a different product. In September 2026, for example, HDFC Bank's loan for commercial property ran from 8.30 to 12.75 per cent, against 7.75 to 13.20 per cent for its home loan. How much it funds follows the bank's own norms for commercial units: ask for that figure before any token.

GST when you buy. Under construction: 5 per cent without input credit in a residential project; 12 per cent with input credit in a commercial one. Paid wholly after the completion certificate, the sale is outside GST.

GST on rent. Commercial rent attracts 18 per cent from a GST-registered landlord; registration is required above ₹20 lakh of turnover. If the landlord is unregistered and the tenant registered, the tenant pays under reverse charge. A home let as a residence is exempt, with narrow exceptions.

A shop is priced on its rent, so do the sum first

Yield is rent divided by price. An illustration in round, made-up figures, not Indore rents or prices:

The same ₹3 lakh of rent is worth ₹42.9 lakh at a 7 per cent yield, ₹50 lakh at 6 and ₹60 lakh at 5. A lower yield means a higher price, and less room if rent falls. Use the all-in price, not the quoted one.

A shop pays only when it is let. One empty month costs 8.3 per cent of the year's rent; three cost a quarter, and a new tenant to find, while the maintenance bill still comes. Read the lease: term, lock-in, yearly increase, who pays what.

Seven checks, in this order

1. The zone. The plan allows commercial use on this site.
2. The building permission. For commercial use, with this unit shown as a shop or office.
3. RERA, for a new project. The Act's "apartment" includes a shop, an office and a showroom.
4. Completion and occupancy. The certificates that say the building may be used.
5. Parking. Fixed by floor area and use. Ask where the required spaces are.
6. Fire safety. Above 12.5 metres, fire-fighting to the National Building Code before occupancy; a high-rise needs the fire authority's clearance.
7. Running costs, in writing. Carpet area, monthly maintenance, tax basis, meter category.

Tax, tariff and loan terms change; confirm each before you sign.

Look up the zone before the shutter

Questions people ask

Can I open a shop in a residential house in Indore?

Only within the plan's mixed-use rules: ground floor, listed roads, area limits, and only after a revised building plan is approved and the charges paid.

Is property tax higher for a shop than a house in Indore?

Yes. IMC's non-residential rate per square foot is more than twice the residential rate in every zone, and a home used for business pays it too.

What is the GST on buying an under-construction shop?

5 per cent without input credit in a residential project, 12 per cent with input credit in a commercial one. Paid wholly after the completion certificate, it is outside GST.

Does RERA apply to shops and offices?

Yes. The Act's definition of an apartment includes a shop, an office and a showroom.

Where the facts come from. The facts and figures in this post come from verified government sources and verified RERA-registered brokers.

Indori Zameen is a private platform. It is not a government body and is not affiliated with one — always confirm a record with the concerned authority before you commit money.