What is GST on under-construction property in 2025?

GST on under-construction residential property is 5% without Input Tax Credit (post April 2019). For affordable housing (carpet area ≤60 sq.m. in metros, ≤90 sq.m. in non-metros, value ≤₹45 lakh), the rate is 1% without ITC. Ready-to-move properties with an Occupancy Certificate are exempt from GST.

Is GST applicable on resale properties?

No. GST does not apply to resale properties. It only applies to the first sale of under-construction properties by the developer. Once an Occupancy Certificate is obtained, all subsequent sales are GST exempt.

What is GST on commercial property purchase?

GST on under-construction commercial property (shops, offices, warehouses) is 12% with Input Tax Credit. Commercial buyers who are GST-registered can claim ITC on this GST against their output tax liability.

How is affordable housing defined for GST purposes?

For GST purposes, affordable housing means: carpet area not exceeding 60 sq.m. in metro cities (Delhi NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad) or 90 sq.m. in non-metro cities, AND the value does not exceed ₹45 lakh. Both conditions must be met.

Was GST on property different before April 2019?

Yes. Before April 1, 2019, under-construction residential properties attracted 12% GST with Input Tax Credit (or 8% for affordable housing with ITC). After April 2019, the rates were reduced to 5% and 1% respectively, but ITC was removed. Most developers passed the benefit of ITC previously claimed, but the effective tax reduction varied.

GST on Property Calculator 2025

Calculate the exact GST applicable on your property purchase. The rate depends on whether the property is under construction or ready-to-move, whether it qualifies as affordable housing, and the property type — residential or commercial.

GST on Property Calculator

Post April 2019 rates — applicable to all new under-construction property purchases

Key rule: Ready-to-move properties where the builder has received an Occupancy Certificate are completely exempt from GST. This calculator applies only to under-construction properties.

Agreement value (₹)

Property type

GST payable

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GST Rate Summary — All Property Types

Property Type	GST Rate	ITC Available?
Under construction — residential (non-affordable)	5%	No
Under construction — affordable housing	1%	No
Under construction — commercial	12%	Yes
Ready-to-move (OC received) — any type	Nil	N/A
Resale property	Nil	N/A
Plotted development	Nil	N/A

What is Affordable Housing for GST?

To qualify as affordable housing under GST (and attract the 1% rate), a property must satisfy both of the following conditions:

Carpet area: Not exceeding 60 sq.m. in metro cities (Delhi NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad) or 90 sq.m. in non-metro cities and towns
Value: The gross amount charged does not exceed ₹45 lakh

If either condition is not met, the property is not affordable housing and attracts 5% GST. A 70 sq.m. flat in Mumbai priced at ₹40 lakh fails the carpet area condition — it attracts 5% even though the price is below ₹45 lakh.

Why Ready-to-Move Properties are GST Exempt

GST on property was introduced on the basis that under-construction property is a "service" — the builder is providing a construction service along with the sale of land. Once the Occupancy Certificate is issued, the construction service is complete. The subsequent sale is purely a sale of immovable property, which falls outside GST's ambit.

This is why buying a ready-to-move flat from a developer with OC saves you 5% GST — on a ₹60 lakh flat, that is ₹3 lakh. Factor this into your comparison between under-construction and ready-to-move options.

GST on Commercial Property — ITC Benefit

Commercial under-construction properties attract 12% GST with Input Tax Credit. If you are a GST-registered business buying a commercial property, you can claim the GST paid as ITC against your output GST liability. This effectively reduces your net GST cost. However, if you are an individual or a non-registered entity buying commercial property, you pay 12% with no ITC benefit.

GST on Parking Spaces

Parking spaces sold as part of a residential apartment attract the same GST rate as the apartment — 5% for non-affordable and 1% for affordable. Parking sold separately as a commercial transaction attracts 18% GST. Developers structure this differently — verify the GST treatment in your agreement for sale.

GST and Stamp Duty — Both Apply Together

GST and stamp duty are separate levies that apply simultaneously to under-construction property purchases. On a ₹70 lakh under-construction flat in Maharashtra for a male buyer: stamp duty = ₹4.2 lakh (6%), registration = ₹30,000, GST = ₹3.5 lakh (5%). Total additional cost = ₹7.7 lakh on a ₹70 lakh property — 11% over the agreement value before brokerage.

GST Rules Are Tested in MahaRERA Exam

The 5%/1% GST rates, the affordable housing definition, and the OC exemption rule appear in the Sales and Documentation topic of the IBPS exam.

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Frequently Asked Questions

If I book an under-construction flat and it gets OC before I register, do I pay GST?

It depends on when the agreement for sale is executed and registered, not when the OC is received. If the agreement for sale was executed and stamped while the property was under construction, GST is applicable at that point. If the OC was received before the agreement was executed, GST does not apply. This timing is important in practice — consult a CA or property lawyer for your specific situation.

Does GST apply to the land component of the property?

No. GST does not apply to the land component. For under-construction residential projects, the government has provided that one-third of the total consideration shall be deemed to be the value of land and GST applies only on the remaining two-thirds. However, most developers present a single price and the GST is calculated on that total amount — the 1/3 land deduction is factored into the 5% effective rate from the original 18%.

What if the builder has not deposited the GST I paid?

You can verify whether the GST has been deposited using the GST portal (gst.gov.in) by checking the builder's GSTIN. If the builder has collected GST but not deposited it, that is a serious offence under the GST Act. Report to the GST authorities. For buyers, the liability is discharged once you pay GST to the supplier — even if the supplier does not deposit it, you cannot be held responsible provided you have proof of payment.

Disclaimer: GST rates shown are based on the GST Council notifications effective as of April 2025. GST rules are subject to change. Verify the applicable rate with a GST consultant or CA before any property transaction. RERAExam is not affiliated with any government authority.

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