Tax
GST on Property Purchase in India
The most under-counted number in Indian home buying. On a ₹1 crore flat it is ₹5 lakh — and it vanishes the day the completion certificate is issued.
The short answer
Under construction: 5% GST. (1% if it qualifies as affordable housing.) No input tax credit for you.
Ready to move, with a completion certificate: NIL. GST simply does not apply.
On a ₹1 crore flat that is ₹5 lakh — and it is a large part of why "ready to move" costs less than its sticker price suggests.
The rates
| What you're buying | GST rate | Input Tax Credit |
|---|---|---|
| Under construction — non-affordable | 5% | None for you |
| Under construction — affordable housing | 1% | None for you |
| Ready to move, WITH completion certificate | NIL | N/A |
| Resale property | NIL | N/A |
| Plot of land (no construction) | NIL | N/A |
| Maintenance charges above ₹7,500/month | 18% | Society may claim ITC |
The single most under-counted number in Indian home buying: on a Rs 1 crore flat, 5% GST is Rs 5 lakh — and it disappears entirely once the completion certificate is issued. That is a large part of why 'ready to move' costs less than its sticker price suggests.
Before 2019, builders charged 12% GST but could claim input tax credit on their materials, which they were supposed to pass on to buyers. Many didn't.
So the structure changed: 5% (or 1%), and no ITC. Simpler, and harder to game.
The practical effect for you is straightforward: 5% of the purchase price, gone. There is no credit to claim, no offset, nothing to recover.
What counts as affordable housing
The 1% rate is worth having, and the definition is narrow. Broadly, a residential unit qualifies where both of these are true:
- Carpet area up to 60 sq metres (≈ 646 sq ft) in a metropolitan city, or 90 sq metres (≈ 969 sq ft) elsewhere; and
- Value up to ₹45 lakh.
Both conditions must be met. A 600 sq ft flat priced at ₹50 lakh does not qualify. Nor does a ₹40 lakh flat of 800 sq ft in Mumbai.
The affordable-housing test uses carpet area — the RERA definition.
Which means a flat advertised as 900 sq ft super built-up may well have a carpet area under 646 sq ft, and qualify for 1% GST rather than 5%.
On a ₹45 lakh flat, that is ₹1.8 lakh. Ask. Builders do not always volunteer it.
The certificate that removes GST entirely
Once the completion certificate has been issued, a sale of the flat attracts no GST at all. It is simply not a transaction GST applies to.
What the certificate is worth
₹1 crore flat.
- Bought under construction — 5% GST
- ₹5,00,000
- Bought after the completion certificate
- ₹0
- The certificate is worth
- ₹5,00,000
This is why a ready flat priced 8% above a comparable under-construction one is, after GST, only about 3% more expensive. It is a very different conversation from the one the sticker prices suggest.
GST on other things you'll pay
- Maintenance charges: 18% GST if they exceed ₹7,500 per member per month and the society's turnover crosses the registration threshold. Large flats in amenity-heavy projects cross this line routinely.
- Car parking, club membership, preferential location charge: generally taxed at the same rate as the flat, where they form part of the composite supply.
- Plot of land, with no construction: no GST. The sale of land is outside GST.
- Resale property: no GST.
- Stamp duty and registration: not GST. Separate, and payable on top.
What people get wrong
1. Not counting it at all
The brochure says ₹8,000 per sq ft. It does not say "plus 5%". On a 1,200 sq ft flat, that ₹5 lakh appears late, and it appears as a surprise.
2. Comparing under-construction and ready prices without adjusting
Take 5% off the under-construction price before you compare. Most buyers never do, and conclude that under construction is far cheaper than it actually is.
3. Not checking whether it qualifies as affordable
1% instead of 5% is a fourfold difference. The test is on carpet area, and a flat advertised at 900 sq ft super built-up may well pass it.
4. Assuming "ready to move" means no GST
A builder can call a flat 'ready to move' because the construction is finished — while the completion certificate has not been issued.
In that case, GST still applies. The exemption attaches to the certificate, not to whether the walls are up.
Ask to see the completion certificate. Not a promise of one. The document. It is worth ₹5 lakh on a ₹1 crore flat, and it is also the thing that tells you whether the building is legal.
We have written this against the current position and checked it carefully. But tax turns entirely on your specific facts: your residential status, when you bought, when you sell, which regime you are on, and what else is in your return.
Note also that the Income Tax Act, 2025 now replaces the 1961 Act, and section numbering is changing even where the substance is not. We use the familiar numbers — 54, 54F, 24(b), 80C — because those are what people search for and what CAs still say. Confirm the current section references with your accountant.
Before you sell a property, pay a CA. On a transaction this size it is the best-value fee you will ever pay, and the cost of getting it wrong runs to lakhs.
Frequently asked questions
What is the GST rate on property in India?
5% on under-construction residential property, or 1% if it qualifies as affordable housing — with no input tax credit for the buyer. A property sold after the completion certificate has been issued attracts no GST at all, and nor does a resale property or a plot of land.
Is GST applicable on ready to move property?
No — provided the completion certificate has been issued. The exemption attaches to the certificate, not to whether the building looks finished. A builder can call a flat 'ready to move' while the CC has not been issued, and in that case GST still applies. Ask to see the document.
What qualifies as affordable housing for 1% GST?
Both conditions must be met: carpet area up to 60 sq metres (about 646 sq ft) in a metropolitan city or 90 sq metres elsewhere, AND value up to Rs 45 lakh. Note that it is CARPET area — so a flat advertised at 900 sq ft super built-up may well qualify, and the builder may not volunteer it. The difference is 1% versus 5%.
Do I pay GST on a resale flat?
No. GST does not apply to resale property, nor to the sale of a plot of land with no construction.
Is GST charged on maintenance?
Yes, at 18%, if the charge exceeds Rs 7,500 per member per month and the society's turnover crosses the GST registration threshold. Larger flats in amenity-heavy projects cross that line routinely.