--- title: "New GST for Purchase of Flat 2026: 5% Rate on Flat Purchase" description: "New GST rate on flat purchases in 2026 is 5% on under-construction residential flats. Apply the correct GST rate automatically with Busy on every invoice." canonical: "https://busy.in/gst-rates/purchase-flat/" author: "Hitesh Aggarwal" published: "2025-04-24T06:03:18.000Z" category: "GST Rates" --- - GST applies only to under-construction flats and not to ready-to-move-in or resale flats. - The GST rate is 1% for affordable housing and 5% for other residential properties, with no Input Tax Credit (ITC) allowed. - Commercial properties are taxed at 12% GST, and ITC is allowed for these. - Affordable housing is defined as having a carpet area up to 60 sq. meters in metros and 90 sq. meters in non-metros, with a price not exceeding ₹45 lakhs. - No GST is payable on resale flats or ready-to-move-in homes with an Occupancy Certificate, but stamp duty and registration charges still apply. # New GST for Flat Purchase in India: Rates, Rules & Buyer Insights 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)**](https://busy.in/gst/input-tax-credit/) is available. This blog provides a complete guide to GST for flat purchases in India, including tax rates, exemptions, and special cases. ## GST on Flat Purchase: When Does It Apply? 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**](https://busy.in/accounting-software/) ## New GST Rates on Under-Construction Flats | Property Type | GST Rate | ITC Allowed? | | --- | --- | --- | | Affordable housing (as defined below) | 1% | No | | Other residential properties | 5% | No | | Commercial property (shops, offices) | 12% | Yes | ## Old GST Rates on Under-Construction Flats ### (Old GST Rates – Applicable Until 21st September) 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 | ##### Affordable Housing Definition: - Carpet area up to 60 sq. meters in metro cities - Carpet area up to 90 sq. meters in non-metros - Price not exceeding ₹45 lakhs **Get a Free Trial –** [**Best GST Accounting Software For Small Business**](https://busy.in/accounting-software/gst-accounting/) Live Demo Available Today ## Issue Credit Notes for Flat Purchase Refunds or Adjustments Trusted by 6,00,000+ Users 4.6 Google Rating \* No credit card required ## HSN Code for Real Estate Services Real estate services fall under [**HSN Code 9954**](https://busy.in/sac-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**](https://busy.in/accounting-software/real-estate/) ## GST Calculation Example for Flats Let’s say you buy an under-construction flat for ₹50 lakhs (non-affordable segment): - **GST @5% = ₹2,50,000** - **Total Payable = ₹52,50,000** If the flat falls under the affordable category: - **GST @1% = ₹50,000** - **Total Payable = ₹50,50,000** Remember: Stamp duty, registration charges, and other state levies are separate and **not covered under GST**. ## Input Tax Credit (ITC) in Real Estate Under the new [**GST regime**](https://busy.in/gst/gst-fundamentals-all-about-goods-and-services-tax-in-india/) **(post-April 2019)**: - **No ITC is allowed for homebuyers** - Builders also **cannot claim ITC** on inputs like cement, steel, labor, etc., under the 5% and 1% rates - ITC is allowed **only for commercial construction** at 12% GST 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**](https://busy.in/accounting-software/inventory-management/) ## GST on Resale Flats or Ready Possession Homes If you are buying: - From an individual (resale flat) - Or from a builder but the flat has **OC issued** **No GST** is payable. You’ll still pay stamp duty and registration charges as per your state rules. ## Final Thoughts 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)**](https://busy.in/gst/) , 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. ## About the author **Hitesh Aggarwal** As a Chartered Accountant with over 12 years of experience, I am not only skilled in my profession but also passionate about writing. I specialize in producing insightful content on topics like GST, accounts payable, and income tax, confidently delivering valuable information that engages and informs my audience. ## Frequently asked questions ### Is GST applicable on ready-to-move-in flats? No, GST is not applicable if the builder has received the Occupancy Certificate. ### What is the GST rate for affordable housing? 1% without ITC, applicable only if the property meets size and price criteria. ### Can I claim GST refund on flat purchase? No, homebuyers cannot claim ITC or refunds on GST paid for residential property. ### Do I pay GST on resale flats? No, resale flats sold by individuals are exempt from GST. ### What if I paid GST before April 2019 at 12%? That rate was valid before the new scheme was introduced. 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