The Short Answer
If your apartment has an Occupation Certificate (OC), you pay zero GST. If it's still under construction, you pay either 1% (affordable housing) or 5% (everything else) on the agreement value — with no input tax credit (ITC) for the builder to pass on to you. Stamp duty and registration charges are separate from GST and apply in both cases.
That single rule decides whether a ₹1.4 crore Sarjapur Road flat costs you ₹7 lakh in GST or nothing.
Two GST Rates, One Cut-Off
The April 2019 GST overhaul reset the rates that still apply in 2026. There are now exactly two slabs for residential property:
| Category | GST Rate | Input Tax Credit |
|---|---|---|
| Affordable housing (under construction) | 1% | None |
| Non-affordable (under construction) | 5% | None |
| Ready-to-move with OC | 0% | N/A |
"Affordable" is defined narrowly: agreement value ≤ ₹45 lakh and carpet area ≤ 60 sq m in metros (Mumbai, Delhi NCR, Chennai, Kolkata, Bangalore, Hyderabad) or ≤ 90 sq m in non-metros. Both conditions, not either. Miss one and you slide into the 5% slab — which is where the vast majority of urban apartments now sit.
What "Under-Construction" Actually Means
The line that decides your GST bill is the Occupation Certificate. Until the local municipal authority issues OC, the unit is "under construction" for tax purposes — even if it looks finished, even if the builder is handing over keys informally, even if you have already moved in.
Conversely, the moment OC is in hand, GST drops to zero on any unit sold thereafter. This is why some buyers wait for OC before signing — a ₹2 crore Gurgaon flat saves ₹10 lakh in GST that way. The trade-off is price: ready-to-move usually trades at an 8–15% premium over launch pricing in the same project.
Why ITC Was Removed (and Why It Matters)
Pre-2019, the rate was 12% but builders could claim Input Tax Credit on cement, steel, fittings, and other inputs and theoretically pass that credit to buyers. In practice, most did not — the rate looked optically high while actual transmission of ITC was patchy. The GST Council removed ITC and dropped the headline rate to 5% / 1%.
Net effect for buyers: you now pay a lower headline GST but cannot ask for any rebate against builder costs. If a 2026 builder claims "we will pass on ITC benefit", that is either misinformation or a marketing gimmick — there is no ITC to pass on at the new rates.
What GST Does Not Apply To
- Plot purchases: 0% GST on raw land or developed plots — only construction services attract GST
- Resale flats: 0% GST regardless of OC status (you're buying from a previous owner, not a builder)
- Stamp duty and registration: separate state levy, ranges 5–8% depending on state and buyer gender (women buyers get rebates in Delhi, Haryana, UP, MP, and a few others)
- Maintenance charges: attract 18% GST only above ₹7,500 per month per flat — the RWA threshold
The Calculation Most Buyers Get Wrong
GST is on the agreement value, not the all-in cost. Common confusion: a buyer assumes 5% applies to base price + amenities + parking + club + tax. Actually:
- Inside the GST base: base sale price, PLC (preferred location charges), floor rise, parking, club membership, IBMS
- Outside the GST base: stamp duty, registration, maintenance corpus, advance maintenance — most builders charge these separately
For a typical 2 BHK in Sarjapur Road at ₹1.4 crore agreement value (non-affordable), GST works out to ₹7 lakh. Add roughly ₹8.4 lakh stamp duty + registration (Karnataka). Total upfront tax outflow: about ₹15.4 lakh on a ₹1.4 crore flat — over and above the headline price.
Three Practical Tips
- Confirm OC status in writing before paying token. Ask for the actual OC copy, not "OC applied for". Once OC is granted, your GST liability vanishes — that is a real lever, not a marketing line.
- Verify the affordable-housing claim yourself. Some builders market 1% GST when the carpet area or agreement value disqualifies. Check both thresholds; a single rupee over ₹45 lakh moves you to 5%.
- Insist on agreement-value clarity. A few builders inflate "other charges" to keep base price low (defending an affordable-housing claim) while extracting margin elsewhere — this can create classification risk for you later if assessed.
The Brickplot Take
GST is a fixed input, not a negotiation lever. Treat it as a known cost when comparing under-construction vs ready-to-move options in the same micro-market. The real decision is whether the under-construction discount (typically 12–15%) outweighs the 5% GST, the construction-period EMI burden, and the possession-delay exposure. Across the Brickplot dataset, for buyers in the ₹1.5–2.5 crore band, ready-to-move with OC is mathematically tighter than launch pricing once GST and 18 months of construction interest are layered in — even before factoring in delivery risk.
Check the Brickplot score for ready-to-move projects across Bangalore, Hyderabad, Pune, Mumbai, and Gurgaon → brickplot.com/properties