An under-construction flat carries GST of 5% of its agreement value, or 1% if it counts as affordable housing. A ready-to-move flat with an Occupancy Certificate carries no GST.
The Rates
| Type of flat | GST | Conditions |
|---|---|---|
| Under construction, not affordable | 5% | Without input tax credit |
| Under construction, affordable housing | 1% | Price up to ₹45 lakh and carpet area up to 60 sq m in metro cities (including Hyderabad) or 90 sq m elsewhere |
| Ready to move, with Occupancy Certificate | 0% | Sold after the OC is issued |
| Resale flat | 0% | Bought from an owner, not a builder |
Source: GST rate notifications for residential real estate (Notification No. 3/2019-Central Tax (Rate), in force from 1 April 2019), published by the GST Council. These rates have applied to residential projects since 1 April 2019. The GST changes of 22 September 2025 cut rates on materials such as cement but left these rates unchanged.
Why It Is 5% and Not 7.5%
The law sets the rate at 7.5% on two-thirds of the price, because one-third is treated as the value of the land. 7.5% of two-thirds is 5% of the full price, which is why cost sheets show 5%.
Worked Example
| Item | Amount |
|---|---|
| Category A (base price, floor rise, facing, parking, amenities) | ₹1,51,45,713 |
| GST at 5% | ₹7,57,286 |
| Category A with GST | ₹1,59,02,999 |
These are the figures from the sample cost sheet DaamDost tests against.
GST on Other Charges
- Floor rise, facing, car parking and amenities that are part of the same sale agreement carry the same rate as the flat (5% or 1%).
- Maintenance collected by the builder usually carries 18% GST. Later, the residents’ association charges 18% only when a member’s maintenance is over ₹7,500 a month and the association’s yearly turnover is over ₹20 lakh; then it applies to the whole amount.
- Corpus fund is a deposit for future repairs and builders usually show it without GST. Ask your builder how they treat it.
- Stamp duty and registration are government charges and carry no GST.
Rules can change; check with the builder or a chartered accountant before you pay.
General information, not legal, tax or financial advice. Rates and rules can change after the date above. Check the actual price with the builder, current rates with the official source, and title and approvals with a property lawyer or chartered accountant before you pay.