GST on Flat Purchase in India
A flat purchase attracts 5% GST in India when the property is under construction, or 1% if it qualifies as affordable housing. A ready-to-move flat with a completion certificate carries no GST at all.
Working out the GST on flat purchase
An under-construction home is taxed at 5%, and the calculator below uses that rate. Affordable housing is 1% and a completed flat carries no GST at all, so the first thing to settle is which of those you are buying. Multiply the taxable value by 5 percent to get the GST, then add it to the base price for the total.
- For an intra-state sale, the 5% splits into 2.5% CGST and 2.5% SGST.
- For an inter-state sale, a single 5% IGST applies instead.
- The calculator on this page is pre-set to the 5% rate and handles both cases.
A worked example
Suppose a flat purchase has a taxable value of ₹60,00,000 before tax. Applying 5% GST works out as follows.
One question decides everything: is it finished?
Almost all of flat-purchase GST turns on a single distinction. Buying before completion means you are buying a construction service, which is taxable. Buying after the builder holds the Completion Certificate or Occupancy Certificate means you are buying immovable property, which Schedule III of the CGST Act places entirely outside GST. That is the legal reasoning, and it is why two identical flats in the same tower can carry very different tax.
| What you are buying | GST rate | Input tax credit |
|---|---|---|
| Under-construction, affordable housing | 1% | Not available |
| Under-construction, other residential | 5% | Not available |
| Ready-to-move with CC or OC | Nil | Not applicable |
| Resale flat from an individual | Nil | Not applicable |
| Plot of land | Nil | Not applicable |
| Under-construction commercial (shop, office) | 18% | Available to registered buyer |
The residential rates — 1%, 5% and Nil — have applied since 1 April 2019, and the GST 2.0 rationalisation of September 2025 left them untouched even as it reshaped most other categories. Commercial construction is the one line in this table that did move: it was 12% with ITC until 22 September 2025, when the withdrawal of the 12% slab took it to 18%, still with ITC for a registered buyer. If you are buying a shop or office and your cost sheet quotes 12%, it is on the old rate.
The affordable housing test is two conditions, not one
To get 1% instead of 5%, the flat must satisfy both a size limit and a price limit. Carpet area up to 60 square metres in a metro, or up to 90 square metres in a non-metro, and a sale price of ₹45 lakh or less. Miss either and the rate is 5%. This matters more than most buyers realise, because on a ₹45 lakh flat the difference between 1% and 5% is ₹1.8 lakh. Some builders quote 5% by default without checking. If your flat qualifies, you are entitled to ask for the 1% rate, and the invoice should reference the relevant notification rather than just showing a number.
The land abatement is already in the rate
This is where people miscalculate badly in both directions. GST rules treat one-third of the total consideration as land value, which is outside GST, and apply tax only to the remaining two-thirds. But that abatement is already built into the headline 1% and 5% figures. You do not apply it again. A flat priced at ₹80 lakh at 5% shows ₹4 lakh of GST on the cost sheet, not ₹2.67 lakh. If you have seen the abatement mentioned somewhere and tried to reduce your number accordingly, that is the error to avoid.
The certificate arriving mid-payment
Most under-construction purchases run on a construction-linked payment plan, so the certificate often lands partway through. The rule is clean: GST applies to instalments paid before the CC or OC is issued, and instalments paid after it are outside GST for the same unit. Some builders continue billing GST out of habit on the later payments. If you are close to possession and the certificate has been issued, check before you pay. Equally, if a builder shows GST on a flat that already has its OC, that invoice is wrong and you can ask for a corrected one.
Nobody gets input tax credit on a home
Both the 1% and 5% rates come without ITC, for the builder and for you. That was the trade the Council made in April 2019: lower headline rates in exchange for removing the credit chain, replacing the older 8% and 12% structure that did allow it. A very small number of long-running projects registered under the pre-2019 scheme continued on the old rates with ITC, though by now most have completed or migrated. If you are buying into a project that has been running for years, ask for the RERA certificate and confirm which scheme applies before you sign.
Costs outside GST, and the invoice to insist on
Stamp duty and registration are state levies entirely outside GST, and they apply whether or not the flat carries GST. So a ready-to-move purchase is GST-free but not tax-free. On the paperwork, insist on a proper tax invoice showing the builder's GSTIN, the SAC code, the rate and the GST amount for every instalment. Without it you have no trail for a RERA complaint, a home-loan disbursement or an eventual resale. Paying GST in cash without an invoice is a serious red flag: the money may never reach the government, and you carry the risk.
Frequently asked questions
Under-construction flats attract 5% GST, or 1% if the flat qualifies as affordable housing. Ready-to-move flats with a completion certificate and resale flats from individuals carry no GST at all.
No. Once the builder holds the Completion Certificate or Occupancy Certificate, the sale is treated as immovable property under Schedule III of the CGST Act and falls outside GST entirely. Stamp duty and registration still apply.
The flat must meet both conditions: carpet area up to 60 square metres in a metro or 90 square metres in a non-metro, and a sale price of ₹45 lakh or less. Missing either condition means the 5% rate applies.
On the full agreement value. GST rules treat one-third as land value, but that abatement is already built into the headline 1% and 5% rates. A ₹80 lakh flat at 5% carries ₹4 lakh of GST, not ₹2.67 lakh.
No. Both the 1% and 5% rates for residential property are without ITC, for the buyer and the builder. This has applied since April 2019, replacing the earlier 8% and 12% rates that did allow credit.