What is GST on property?
Also called: GST on flat, GST on under-construction flat, GST on real estate
Only under-construction homes attract GST: 5% (without input tax credit), or 1% for affordable housing. Ready-to-move flats sold after the completion certificate, and resale flats, carry no GST.
The rates for residential property have been in place since April 2019. An affordable house is one with a carpet area up to 60 sq m in the metro cities (Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata and Mumbai, including the Mumbai Metropolitan Region) or up to 90 sq m elsewhere, and a price up to ₹45 lakh. Both conditions have to be met. The rate already includes a deduction for the land value, which is why it's lower than the headline services rate.
GST is payable on every instalment you pay before the completion certificate is issued. What you pay after it isn't taxed. That leaves a grey area when a builder gets the certificate in phases or collects most of the price early, so read the tax invoice for each demand.
It applies to the whole agreement value, including preferential location charges, floor rise and car parking sold as part of the flat. Separate items follow their own rules. Maintenance charges to a resident welfare association attract 18% GST only if the monthly amount per member exceeds ₹7,500, and then on the full sum, not the excess. Club membership, legal charges and the like billed separately generally carry 18%. Stamp duty and registration are state levies and have nothing to do with GST.
Commercial units such as shops and offices are taxed on different terms, with input tax credit, so confirm the rate on the builder's invoice before you sign.
An ₹80 lakh 2 BHK under construction in Whitefield, Bengaluru attracts 5% GST, or ₹4 lakh. A 55 sq m carpet flat priced at ₹42 lakh in Indore qualifies as affordable housing, so GST is 1%, or ₹42,000.
Buyers pay the full price before the completion certificate "for a discount" and end up paying GST on all of it. Paying the final instalments after the certificate saves 5% on that portion.
Questions people ask about GST on property
Is GST payable on a resale flat?
No. A resale flat is a sale of immovable property between owners, which is outside GST. You pay only stamp duty and registration.
Can I claim input tax credit on GST paid for my flat?
No. Residential flats are taxed at 1% or 5% without input tax credit, and home buyers can't claim credit in any case.