New GST for Flat Purchase in India: Rates, Rules & Buyer Insights
- GST on flat purchase applies to under-construction flats. Ready-to-move-in and resale flats are generally outside GST.
- The GST on residential flat purchase is 1% for affordable housing and 5% for other residential properties without ITC.
- GST on flats below 45 lakhs is generally 1% if they meet affordable housing conditions.
- Under-construction commercial properties may attract GST depending on the type of real estate project and applicable classification.
- Completed flats with an Occupancy Certificate and resale flats do not attract GST, but stamp duty and registration charges apply.
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.
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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 |
Type of Property
GST Applicable?
Type of Property
GST Applicable?
Type of Property
GST Applicable?
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New GST Rates on Under-Construction Flats
| Property Type | GST Rate | Rate Before 22 Sep 2025 |
|---|---|---|
| Affordable housing | 1% | 1% |
| Other residential properties | 5% | 5% |
Property Type
GST Rate
Rate Before 22 Sep 2025
Property Type
GST Rate
Rate Before 22 Sep 2025
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
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Issue Credit Notes for Flat Purchase Refunds or Adjustments
* No credit card required
SAC Code for Real Estate Construction Services
Construction services for residential and commercial properties are generally classified under SAC Code 9954. The specific SAC code and GST rate depend on the type of construction and applicable project classification.
| Service Type | SAC Code | GST Rate |
|---|---|---|
| Construction of residential flats | 995411 | 1% or 5%* |
| Construction of commercial buildings | 995414 | Depends on project classification* |
Service Type
SAC Code
GST Rate
Service Type
SAC Code
GST Rate
*The 1% and 5% rates are effective GST rates applicable to eligible under construction residential apartments, depending on whether the property qualifies as affordable housing. Commercial property rates can vary based on whether the project is an RREP or another type of REP.
GST Calculation Example for Flats
Let’s say you buy an under construction flat for ₹50 lakhs in the non affordable segment:
- GST @ 5% = ₹2,50,000
- Total Payable = ₹52,50,000
If the flat qualifies as affordable housing and costs ₹40 lakhs:
- GST @ 1% = ₹40,000
- Total Payable = ₹40,40,000
Remember: Stamp duty, registration charges, and other applicable state levies are separate and not covered under GST.
Input Tax Credit (ITC) in Real Estate
Under the new GST regime (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.
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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) , 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.
