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Guide · GST Rates

GST on Property Purchase —
1%, 5% or Nil?

The correct GST rate on an under-construction flat, affordable housing, commercial property and ready-to-move homes — plus how stamp duty, ITC and the OC rule actually work.

TaxClue Editorial Desk Updated 18 August 2026 6 min read 16 FAQs answered
Updated for FY 2026-27 GST Expert Reviewed Homebuyer & Investor Guide
Quick Answer

GST applies only while a property is under construction. It is 1% for affordable housing, 5% for other under-construction residential flats (both without ITC) and 12% for commercial property (with ITC). Once a property receives its Occupancy / Completion Certificate, it is ready-to-move and carries no GST — you pay only stamp duty and registration.

Affordable home 1%
Other residential (UC) 5%
Commercial (UC) 12%
Ready-to-move / OC Nil
At a glance

GST Rate on Property — Decision Table

Every common property-purchase scenario in India, with the GST rate and whether the buyer can claim Input Tax Credit.

Property & StatusGST RateBuyer ITCNotes
Affordable residential — under construction1%No≤ ₹45L & ≤ 60/90 sqm carpet
Other residential flat — under construction5%NoStandard rate since 1 Apr 2019
Commercial (shop/office) — under construction12%YesITC for GST-registered buyer
Any residential — ready-to-move (OC/CC)Nil—Sale of immovable property
Commercial — ready-to-move (OC/CC)Nil—Only stamp duty applies
Plot / land (with or without sale)Nil—Land is not a supply under GST
Residential rent — individual tenantExempt—See our GST-on-rent guide
Commercial rent — registered tenant18%YesRenting of immovable property

Property purchase rates come from the 1 April 2019 real-estate scheme and were NOT changed by the GST 2.0 two-slab reform of 22 September 2025. Confirm on the official GST portal before signing.

The core question

Under-Construction vs Ready-to-Move

One line decides whether you pay GST at all: has the property received its Occupancy Certificate (OC) or Completion Certificate (CC)? Before OC it is a supply of construction service and GST applies; after OC it is sale of immovable property and GST does not.

Nil

Ready-to-move — no GST

  • OC / CC already issued
  • Treated as sale of immovable property
  • Only stamp duty & registration payable
  • No GST on any instalment
  • No ITC question — nothing charged
vs
1–12%

Under construction — GST applies

  • Booked before OC / CC
  • 1% affordable · 5% other residential
  • 12% commercial (ITC available)
  • GST on each instalment paid
  • Builder collects & deposits the GST
The OC date is what matters — not possession

If you book a flat before the builder obtains the OC, every instalment carries GST even if you take possession later. Buy the same flat after OC and there is zero GST. Always confirm the OC/CC status in writing before signing.

Not sure if your flat is under-construction or OC-received for GST?

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The 1% rate

Affordable Housing — Who Gets 1% GST?

A residential flat qualifies for the reduced 1% GST only if it meets all the affordable-housing conditions together. Miss any one and the rate is 5%.

  • Total consideration ≤ ₹45 lakh (excluding GST)
  • Carpet area ≤ 60 sqm in metro cities
  • Carpet area ≤ 90 sqm in non-metro cities
  • Part of a RERA-registered real-estate project
  • Under construction (booked before OC/CC)

Metro cities for the 60 sqm limit are Delhi NCR, Mumbai (MMR), Bengaluru, Hyderabad, Chennai, Kolkata; all other cities use the 90 sqm limit. Both the price and the carpet-area cap must be satisfied.

Worked example

How GST Adds Up — ₹60 Lakh Flat

5% Non-affordable flat (UC)

Agreement value₹60,00,000
GST @ 5%₹3,00,000
Cost + GST₹63,00,000

1% Affordable flat (UC)

Agreement value₹42,00,000
GST @ 1%₹42,000
Cost + GST₹42,42,000

Neither figure includes stamp duty and registration, which are charged separately by the state on the same purchase. A homebuyer cannot claim ITC on either the GST or the stamp duty.

Buying an under-construction flat? Get the GST + stamp-duty maths checked before you sign.

Talk to a Tax Expert →
Separate from GST

Stamp Duty & Registration — Not the Same as GST

GST and stamp duty are two different taxes levied by two different governments. GST is a central/state levy on under-construction property; stamp duty is a state levy on registration of the sale deed and applies to every property — under-construction or ready.

GSTStamp Duty & Registration
Levied byCentre + State (GST)State government
Applies toOnly under-construction propertyEvery property registration
Typical rate1% / 5% / 12%5–8% stamp duty + ~1% registration
On ready-to-move (OC)Not chargedCharged
ITC / set-offNo ITC for homebuyerNever creditable

Stamp-duty rates and the base of computation vary by state — check your state's stamp Act before budgeting.

TaxClue Insight

For an under-construction flat you may pay both GST (on the construction value) and stamp duty (on registration) — they are not interchangeable and one is never a credit against the other. Ready-to-move homes carry only stamp duty, which is why the sticker GST saving on a completed flat is real.

Credit & special cases

ITC, JDA & Other Property Situations

Since 1 April 2019 the reduced 1%/5% residential rates come with a hard condition: no Input Tax Credit — for the buyer or the builder. Only commercial buyers at 12% retain ITC.

  • Residential homebuyer: cannot claim ITC on the 1%/5% GST — it is a final cost.
  • Builder (residential): ITC on cement, steel and inputs is blocked for 1%/5% projects.
  • Commercial buyer (registered): can claim the 12% GST as ITC against output tax.
  • Plot / land: outside GST entirely — sale of land is neither goods nor services.
  • Ready-to-move: no GST, so no ITC question arises.
Complex deals

GST on Joint Development Agreements (JDA)

In a Joint Development Agreement, the landowner transfers development rights (FSI) to the developer and receives constructed units in return. GST applies on the transfer of development rights and on the construction service for the landowner's share, generally crystallising when the OC/CC is issued. JDA valuation and reverse-charge treatment are technical — get professional advice for these transactions.

GST likely applies

  • Flat / office booked before OC/CC
  • Instalments paid to the builder during construction
  • Commercial unit bought from a developer
  • Landowner / developer share under a JDA

No GST (stamp duty only)

  • Ready-to-move flat with OC/CC issued
  • Resale of a completed property
  • Purchase of a plot or agricultural land
  • Home fully paid after OC in a resale

JDA, commercial ITC or a mixed-use project? Get the GST position mapped correctly.

Talk to a GST Expert →
Government sourcesRates & notifications: gst.gov.in · CBIC rate finder: cbic-gst.gov.in · Real-estate scheme: Notification 03/2019-CT(R) (eff. 1 Apr 2019) · No GST after OC/CC: Schedule III, CGST Act 2017
People also ask

Frequently Asked Questions

Rates & Slabs
What is the GST rate on an under-construction flat?
For an under-construction residential flat, GST is 1% for affordable housing (price up to ₹45 lakh and carpet area up to 60 sqm in metros / 90 sqm in non-metros) and 5% for all other residential flats. Both rates are without Input Tax Credit. Commercial units under construction are taxed at 12% with ITC. These rates come from the 1 April 2019 real-estate scheme and were not changed by the GST 2.0 reform of 22 September 2025.
Is there GST on a ready-to-move property?
No. A completed property that has received its Occupancy Certificate (OC) or Completion Certificate (CC) is treated as a sale of immovable property under Schedule III of the CGST Act, which is neither a supply of goods nor of services. So there is no GST on ready-to-move homes — the buyer pays only stamp duty and registration fees. GST applies only during the construction phase, before OC.
Did GST 2.0 change the rate on property purchase?
No. The GST 2.0 rationalisation effective 22 September 2025 restructured goods and services into a two-slab (5%/18%) system with a 40% demerit rate, but it did not touch the real-estate purchase rates. Under-construction homes remain at 1% (affordable) and 5% (other), commercial at 12%, and ready-to-move property remains outside GST.
What is the GST rate on commercial property purchase?
An under-construction commercial property (shop, office, showroom) is taxed at 12% GST, and a GST-registered buyer using it for business can claim the 12% as Input Tax Credit. A ready-to-move commercial property that has its OC/CC carries no GST — only stamp duty applies.
Affordable Housing
When does a flat qualify for the 1% affordable-housing GST rate?
A flat gets the 1% rate only if it satisfies all conditions together: total consideration up to ₹45 lakh (excluding GST), carpet area up to 60 sqm in metro cities or up to 90 sqm in non-metro cities, it is part of a RERA-registered project, and it is under construction. Miss any single condition — for example price above ₹45 lakh — and the rate becomes 5%.
Which cities count as metros for the 60 sqm carpet-area limit?
For the affordable-housing 60 sqm cap, the metro cities are Delhi NCR, Mumbai (Mumbai Metropolitan Region), Bengaluru, Hyderabad, Chennai and Kolkata. All other cities use the more generous 90 sqm carpet-area limit. Both the ₹45 lakh price cap and the applicable carpet-area cap must be met.
Is the ₹45 lakh limit on carpet value or agreement value?
The ₹45 lakh affordable-housing ceiling is the total consideration / gross amount charged for the flat, excluding GST but including most charges the builder recovers as part of the price. If the total consideration exceeds ₹45 lakh, the flat is non-affordable and attracts 5% GST even if its carpet area is within the limit.
Stamp Duty & ITC
Is stamp duty separate from GST on property?
Yes, entirely. GST is a Centre/State levy on under-construction property; stamp duty is a State levy on registration of the sale deed and applies to every property, under-construction or ready. On an under-construction flat you may pay both GST (on the construction value) and stamp duty (on registration). On a ready-to-move flat you pay only stamp duty and registration, no GST.
How much is stamp duty on a property purchase?
Stamp duty is set by each state and typically ranges from 5% to 8% of the property value, plus a registration fee of around 1%. Many states offer concessions for women buyers or affordable homes. Because stamp duty is a state subject, the exact rate and the value on which it is computed vary — always check your state stamp Act.
Can a homebuyer claim ITC on GST paid for a flat?
No. Since 1 April 2019, buyers of under-construction residential flats cannot claim Input Tax Credit on the 1% or 5% GST they pay — the reduced rates were introduced with an explicit no-ITC condition. Builders also cannot pass on input credit for residential projects. Only GST-registered buyers of commercial property at 12% can claim ITC.
Can I claim ITC on stamp duty or registration charges?
No. Stamp duty and registration fees are state levies outside the GST framework, so they can never be claimed as Input Tax Credit against your GST liability. This applies to every buyer — residential or commercial.
Special Cases
Is GST applicable on the purchase of a plot or land?
No. Sale of land is listed in Schedule III of the CGST Act as neither a supply of goods nor a supply of services, so it is outside GST. Buying a plot or agricultural land attracts only stamp duty and registration. However, if a developer charges separately for construction or development works on the plot, GST can apply to that service component.
Is there GST on the resale of a completed property?
No. Resale of a completed property that already has its OC/CC is a sale of immovable property, outside GST. The buyer pays only stamp duty and registration on the resale. GST would apply only if you were buying an under-construction unit directly from a builder before OC.
What is the GST treatment of a Joint Development Agreement (JDA)?
In a JDA, the landowner transfers development rights (FSI) to the developer and receives constructed units in return. GST applies on the transfer of development rights and on the construction service the developer provides for the landowner's share, generally crystallising when the OC/CC is issued, with reverse charge applicable in defined situations. JDA valuation is technical — professional advice is strongly recommended.
Is GST charged on car parking or preferential-location charges with a flat?
Charges that are naturally bundled with the sale of an under-construction flat — such as preferential-location charges or covered car parking sold with the unit — are generally treated as part of the composite construction supply and taxed at the same 1%/5% rate as the flat. Standalone or optional charges may be assessed separately; confirm the builder's breakup and consult a GST professional.
Is GST applicable on rent from property?
That is a separate question from purchase. Residential property let to an individual for personal use is exempt, while commercial rent to a registered person is taxed at 18%. Residential property let to a GST-registered business attracts 18% under reverse charge. See our dedicated GST-on-rent guide for the full picture.
If you would rather not do it yourself

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