GST on Under-Construction Property
5% GST applies on under-construction residential properties (1% for affordable housing under Rs 45 lakh or under 60 sqm in metros). Zero GST on ready-to-move (OC obtained) properties.
What is GST on Property?
Goods and Services Tax (GST) applies to under-construction residential properties — those for which the Occupancy Certificate has not yet been obtained at the time of purchase. Properties that have already received OC are considered immovable property transfers (not a service), and are therefore outside the GST framework with zero GST applicable.
GST Rates on Residential Property
| Category | GST Rate | Conditions |
|---|---|---|
| Regular residential (under-construction) | 5% | Carpet area more than 60 sqm in metros or Rs 45 lakh and above |
| Affordable housing (under-construction) | 1% | Carpet area up to 60 sqm in metro cities, up to 90 sqm in non-metro; AND value up to Rs 45 lakh |
| Ready-to-move (OC obtained) | 0% | No GST applicable |
| Commercial property | 12% | Under-construction commercial |
How GST is Calculated
GST is charged on the total consideration including the preferential location charges (PLC), floor rise charges, parking charges, infrastructure development charges — everything on the builder invoice. It is computed exclusive of stamp duty and registration (which are state taxes and outside GST).
Example: Under-construction apartment with a total cost of Rs 80 lakh. GST at 5% = Rs 4 lakh. Total outflow to builder = Rs 84 lakh. Stamp duty and registration paid separately to the government.
Input Tax Credit (ITC) Restriction
Under the post-April 2019 GST regime, builders cannot pass on Input Tax Credit (ITC) to buyers — the 5% rate is effective net of ITC. Before this change, some builders offered higher rates with ITC pass-through that occasionally resulted in net lower buyer cost. Today, 5% is the clean, no-ITC rate.
Ready-to-Move Premium Justified by Zero GST
The 5% GST saving on a Rs 80 lakh apartment (Rs 4 lakh) is one reason buyers sometimes pay a premium for ready-to-move inventory. When evaluating ready vs under-construction, add the GST cost to the under-construction price for an accurate comparison.
How Brickplot Uses This
Brickplot price comparisons between projects transparently show whether quoted prices include or exclude GST. Our total cost of ownership calculator adds GST at the applicable rate to the quoted consideration, giving buyers a true apples-to-apples cost comparison across ready-to-move and under-construction inventory.
Related Terms
- Stamp Duty — state tax levied alongside GST on under-construction purchases
- Registration Charges — payable at registration, separate from GST
Related terms
Brickplot verifies gst on under-construction property disclosures on every reviewed project as part of the independent 11-axis score. No builder commissions. No editorial override.