GST on under-construction property in India - citizen guide 2026

If you are buying an under-construction flat in India, you pay GST on the builder's price, but a ready-to-move flat with a completion certificate carries no GST at all. The rate depends on whether the home counts as affordable housing.

GST is the tax on the construction service a builder supplies while a flat is being built. You pay it only when the sale happens before the building gets its completion certificate. A finished, ready-to-move flat is treated as immovable property, not a service, so no GST applies.

The rates flow from a set of notifications issued by the Central Board of Indirect Taxes and Customs, the GST authority under the Ministry of Finance. See cbic-gst.gov.in. Notifications 3 to 8 of 2019, Central Tax Rate, dated 29 March 2019, brought in the current structure from 1 April 2019: 1 percent GST on affordable residential apartments and 5 percent on other residential apartments, both without input tax credit.

The value on which GST is charged includes a deduction for the land portion. Paragraph 2 of Notification 11/2017-Central Tax Rate deems one-third of the total amount to be the land value. In Munjaal Manishbhai Bhatt v. Union of India, R/Special Civil Application No. 1350 of 2021, decided 6 May 2022, the Gujarat High Court held this fixed one-third deduction is not mandatory and is optional where the actual land value is ascertainable. So if your agreement separately states a higher land price, the deemed one-third is not forced on you.

1. Check the project's RERA registration and ask the builder whether a completion certificate has been issued for your block.
2. If no completion certificate exists yet, the flat is under-construction and GST applies on the construction value.
3. Confirm whether the home qualifies as affordable housing using carpet area and total price.
4. Apply 1 percent GST for affordable homes or 5 percent for others, without input tax credit, on the value after the land deduction.
5. Get a tax invoice from the builder showing the GST charged and the builder's GSTIN.
6. Pay stamp duty and registration charges to the state separately, since these are not part of GST.
7. If you suspect wrong GST has been charged, raise it in writing with the builder and keep the invoice for any complaint.

• Builder-buyer agreement or allotment letter showing the sale price
• Tax invoice from the builder showing GST amount and the builder's GSTIN
• RERA registration details of the project
• Completion certificate or occupancy certificate, if the flat is claimed as ready-to-move
• Carpet area statement to test the affordable-housing limit
• Payment receipts and bank statements for each instalment

• Confusing GST with stamp duty. Stamp duty is a state charge on registration and always applies, even on ready flats.
• Paying GST on a ready-to-move flat. If the completion certificate was issued before your sale, no GST is due.
• Assuming every cheaper flat is affordable housing. Both the carpet area limit and the ₹45 lakh price cap must be met.
• Forgetting that the 1 percent and 5 percent rates come without input tax credit, so the builder cannot pass credit benefits to you.
• Not insisting on a proper tax invoice with the GSTIN, which you need if you ever dispute the charge.

No. If the flat received its completion certificate before you bought it, the deal is a sale of immovable property, not a construction service, so no GST applies. You still pay stamp duty and registration charges to the state.

It is 1 percent for affordable residential apartments and 5 percent for other residential apartments, both without input tax credit, effective from 1 April 2019 under the CBIC notifications dated 29 March 2019.

A residential apartment with a carpet area up to 60 square metres in metropolitan cities or up to 90 square metres in non-metro cities, where the gross amount charged is not more than ₹45 lakh.

The land portion is excluded. Paragraph 2 of Notification 11/2017 deems one-third of the price as land value. The Gujarat High Court in Munjaal Manishbhai Bhatt held this one-third deduction is optional where the actual land value is known.

No. Resale of a completed flat between two owners is a transfer of immovable property and does not attract GST. Only the first sale of an under-construction unit by the builder does.

No. The builder must issue a tax invoice showing the GST amount and the builder's GSTIN. Always insist on this document, as you need it to verify the rate and to raise any complaint.

No. Stamp duty and registration charges are state levies on the registration of the property and are completely separate from GST. You pay both where the flat is under-construction.

You can verify rates on the CBIC GST portal at cbic-gst.gov.in and in the GST Council's real estate sector FAQ, both linked in the Sources section below.

• GST Council - FAQ on real estate sector, rates and affordable housing definition
• CBIC GST portal - notifications and rates
• Munjaal Manishbhai Bhatt v. Union of India, Gujarat High Court, 6 May 2022

• The RTI Playbook
• RERA complaint for builder delay in possession
• Apply for a home loan and PMAY benefit
• Get an encumbrance certificate online
• Transfer property by gift deed