BUSY is a simple, yet powerful GST / VAT compliant Business Accounting Software that has everything you need to grow your business.
Buying a flat or apartment is one of the biggest investments in a person’s life. Whether it’s for personal use or investment, understanding the Goods and Services Tax (GST) on flat purchases is essential. While GST has simplified real estate taxation, many buyers still have questions about when it applies, how much is charged, and whether Input Tax Credit (ITC) is available.
This blog provides a complete guide to GST for flat purchases in India, including tax rates, exemptions, and special cases.
GST applies only to under-construction flats and properties being sold by a builder. If you’re buying a ready-to-move-in flat, where the completion certificate has been issued, GST does not apply.
| Type of Property | GST Applicable? |
|---|---|
| Under-construction property | Yes |
| Ready-to-move-in (with Occupancy Certificate) | No |
| Resale flat (individual to individual) | No |
Get a Free Trial – Best Accounting Software For Small Business
In April 2019, the government revised GST rates on real estate. Here are the latest rates:
| Property Type | GST Rate | ITC Allowed? |
|---|---|---|
| Affordable housing (as defined below) | 1% | No |
| Other residential properties | 5% | No |
| Commercial property (shops, offices) | 12% | Yes |
Get a Free Trial – Best GST Accounting Software For Small Business
Real estate services fall under HSN Code 9954, which is used for construction of residential and commercial buildings.
| Service Type | HSN Code | GST Rate |
|---|---|---|
| Construction of residential flats | 995411 | 1% or 5% |
| Construction of commercial property | 995412 | 12% |
Get a Free Demo of – Real Estate Accounting & Billing Software
Let’s say you buy an under-construction flat for ₹50 lakhs (non-affordable segment):
If the flat falls under the affordable category:
Remember: Stamp duty, registration charges, and other state levies are separate and not covered under GST.
Under the new GST regime (post-April 2019):
This ensures builders don’t pass on tax benefits to themselves, keeping home prices fair for consumers.
Explore a Free Demo of – Best Inventory Management Software For Small Business
If you are buying:
No GST is payable. You’ll still pay stamp duty and registration charges as per your state rules.
GST has brought uniformity in flat pricing across states, but it’s crucial to know whether your property is eligible for GST (Goods and Services Tax), what rate applies, and how it affects your final cost. While GST does not apply to completed or resale flats, under-construction homes are taxed—1% for affordable and 5% for others—without ITC. Make sure to get all invoices and certificates from your builder to stay tax-compliant and informed.
BUSY is a simple, yet powerful GST / VAT compliant Business Accounting Software that has everything you need to grow your business.