GST on Flat Purchase in 2026: Rates, OC Rule and Hidden Charges
Under-construction flats carry 5% GST, affordable homes 1%, and a flat with its completion or occupancy certificate carries none. Here's how that plays out on a real price sheet.
Two flats in the same Noida sector, both priced at ₹1.2 crore. One is in a tower still going up; the other has its occupancy certificate. The first costs you about ₹6 lakh more in tax before you've paid a rupee of stamp duty. That gap is GST, and it's the single biggest reason ready flats can work out cheaper than their price tags suggest. This guide covers how GST on flat purchase works in 2026, what it applies to on the price sheet, and where builders sometimes charge more than they should.
The two GST rates for new flats
Since 1 April 2019, homes in residential projects have been taxed at two concessional rates, without input tax credit:
| Type of flat | Effective GST rate | Input tax credit to builder |
|---|---|---|
| Affordable residential apartment | 1% | No |
| Any other residential apartment | 5% | No |
| Ready flat with completion or occupancy certificate | No GST | Not applicable |
| Resale flat bought from an owner | No GST | Not applicable |
These are effective rates. The notified rates are 1.5% and 7.5%, but a third of the price is deemed to be land (which isn't taxed), which brings them down to 1% and 5% of the full agreement value. Your builder should show the 1% or 5% on each demand letter.
The GST rate overhaul that took effect on 22 September 2025 left both rates alone. It did cut GST on cement from 28% to 18%, which lowers builders' costs. Since builders can't claim input credit on residential projects anyway, don't expect that cut to show up as a discount unless you ask for one.
What counts as "affordable" for the 1% rate
Both conditions must be met:
- Carpet area up to 60 sq m (about 646 sq ft) in metropolitan cities, or up to 90 sq m (about 969 sq ft) elsewhere.
- Price up to ₹45 lakh.
For this rule the metros are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurugram and Faridabad), Hyderabad, Kolkata and Mumbai (the whole MMR). A 640 sq ft carpet 2 BHK in Greater Noida West priced at ₹44 lakh qualifies. The same flat at ₹46 lakh doesn't, and pays 5% on the whole price. Check the carpet area on the RERA registration, not the brochure's super area.
GST on flat purchase once the OC is issued
GST on flats is a tax on construction services. Once the competent authority issues the completion certificate, or the first occupation happens (whichever is earlier), the sale of the flat is treated as a sale of immovable property, which is outside GST. That's why ready-to-move homes with an OC and all resale flats carry no GST; you pay only stamp duty and registration.
What people get wrong: assuming "ready" means OC. Some towers look finished and are being handed over for fit-outs while the OC is still pending. Until the certificate is issued, GST applies. Ask for a copy of the OC or completion certificate for the specific tower, and check it against the local authority's records. If the builder can't show it, treat the flat as under construction for tax.
If you booked before the OC and some instalments fall due after it, the treatment of those later payments isn't always straightforward. Ask the builder, in writing, how it will bill GST on post-OC instalments before you sign the agreement.
Which charges on the price sheet attract GST
A price sheet in Noida, Gurugram or Pune usually has more lines than the base price. Charges that are part of the flat itself are taxed at the same 5% or 1%:
- Preferential location charges (PLC) for a park-facing, corner or higher-floor unit.
- Floor rise charges.
- External and internal development charges billed with the flat.
- Car parking, when it's allotted as part of the same sale.
Charges for services that are separate from the construction of the flat can be billed at 18%. Club membership, advance maintenance for the first one or two years, and some "facility" charges often fall here. Ask for a line-by-line breakdown showing the GST rate on each item. If a PLC line shows 18%, question it.
A worked price sheet
| Item | Amount | GST rate | GST |
|---|---|---|---|
| Base price | ₹1,05,00,000 | 5% | ₹5,25,000 |
| PLC (park facing) | ₹4,00,000 | 5% | ₹20,000 |
| Covered car parking | ₹4,00,000 | 5% | ₹20,000 |
| Club membership | ₹2,00,000 | 18% | ₹36,000 |
| Advance maintenance (24 months) | ₹1,20,000 | 18% | ₹21,600 |
| Total | ₹1,16,20,000 | ₹6,22,600 |
Figures are illustrative. Stamp duty is extra and depends on the state; use the UP stamp duty calculator or the page for your state. Home loans usually cover a share of the agreement value, not the GST, so plan to pay it from savings. The home affordability calculator helps you see the full cash need.
GST on maintenance charges after you move in
Once the society or RWA takes over, a separate rule applies. Contributions to a resident welfare association are exempt up to ₹7,500 per member per month. The RWA also has to register for GST only if its annual turnover crosses ₹20 lakh. If both limits are exceeded, 18% GST is charged.
CBIC's circular of July 2019 says that when the monthly charge crosses ₹7,500, the whole amount is taxable, not just the excess: on ₹9,000 a month, GST is on ₹9,000. The Madras High Court has taken a different view, reading the exemption as applying to the first ₹7,500, so the position is contested. In most large societies, the CBIC reading is what you'll see on the bill.
A family with two flats in the same society is treated as a member for each flat, so the ₹7,500 test applies per flat.
Ready flat or under construction: putting GST in the comparison
On a ₹1.2 crore flat, 5% GST is ₹6 lakh. An under-construction purchase usually adds another cost too: pre-EMI interest on the part of the loan already released, for as long as construction runs. Against that, builders often price under-construction towers lower, and staged payments let you spread the outflow.
The fair test is simple. Add GST, the pre-EMI interest you expect to pay and the rent you'll keep paying until possession to the under-construction price. Then compare that total with the ready flat's price. If the ready flat is within a few lakh, the certainty of moving in now, with the OC already in hand, is usually worth more than the paper discount.
Five checks before you pay the first instalment
- Confirm the GST rate on each line in the agreement for sale, not just the booking form.
- If you're claiming the 1% rate, check the carpet area and price against both limits.
- For a "ready" flat, see the OC or completion certificate for your tower.
- Make sure GST is shown separately on every demand letter and receipt, with the builder's GSTIN.
- Keep every tax invoice. You'll need them if a demand is ever disputed.
Comparing an under-construction flat with a ready one nearby is worth doing with GST in the numbers. The ready-to-move projects in Noida and Noida property rates pages are a good place to start.
Frequently asked questions
Is GST applicable on ready-to-move flats?
No, not once the completion or occupancy certificate has been issued. The sale is then a sale of immovable property, which is outside GST. You pay stamp duty and registration charges only.
Is GST charged on a resale flat?
No. A resale flat bought from an individual owner does not attract GST. Stamp duty and registration charges apply as usual.
What is the GST rate on under-construction flats in 2026?
5% of the agreement value for regular residential flats and 1% for affordable housing, both without input tax credit. These rates have applied since April 2019 and were not changed by the September 2025 GST rate revision.
Is GST charged on society maintenance?
Yes, at 18%, if the RWA's annual turnover exceeds ₹20 lakh and the charge exceeds ₹7,500 per member per month. CBIC's view is that the whole amount is then taxable, though the Madras High Court has read it differently.
Sources: CBIC: GST rates for goods and services · CBIC Circular No. 109/28/2019-GST (RWA maintenance charges) · TaxGuru: GST on RWA maintenance charges
