The short answer
Under-construction residential flat, from a builder: GST at an effective 5% of the total price, without input tax credit to the builder. Affordable residential flat — carpet area up to 60 square metres in metropolitan cities or 90 square metres elsewhere, and price up to ₹45 lakh: an effective 1%. These rates have applied since 1 April 2019 and were not changed by the GST rate rationalisation of 22 September 2025.
Ready-to-move flat where the whole price is paid after the completion (or occupancy) certificate, or after first occupation: no GST. Resale by one owner to another: no GST. Sale of land: no GST. These are outside GST under Schedule III of the CGST Act, 2017.
Under-construction commercial unit (shop, office) outside a residential project: GST at 18% on two-thirds of the price, an effective 12% of the total, and the builder may take input tax credit. A business buyer may be able to claim the GST as credit.
Society maintenance: exempt where the resident welfare association charges a member up to ₹7,500 a month; above that, 18% — on the whole amount according to the CBIC, though one High Court has held only the excess is taxable. Residential rent: exempt, except where the dwelling is let to a GST-registered person, who then pays 18% under reverse charge — unless the tenant is a registered proprietor renting a home to live in, in a personal capacity.
GST is separate from stamp duty. On an under-construction flat you pay both: GST to the builder on each instalment, and stamp duty to the state on the agreement or sale deed. See the stamp duty guide.
Why the headline rates are 5% and 1%
The rates for residential construction are set in Notification No. 11/2017-Central Tax (Rate), as amended with effect from 1 April 2019 on the GST Council's recommendation. Legally, GST is 7.5% (non-affordable) or 1.5% (affordable) on the value of the construction service, and the value of land is deemed to be one-third of the total amount charged. GST is therefore levied on two-thirds of the price, which makes the effective rate 5% or 1% of the total price.
Check: on a ₹90 lakh flat, two-thirds is ₹60 lakh, and 7.5% of ₹60 lakh is ₹4.5 lakh — exactly 5% of ₹90 lakh.
The builder cannot claim input tax credit on materials and services under these rates, which is why the rate is low. Ask the builder to confirm on the agreement that the project is under the 1 April 2019 rates. Projects that were ongoing on 31 March 2019 could opt to continue at the older rates with input tax credit; that option had to be exercised by the promoter in 2019, so very few remain.
What counts as affordable housing for 1% GST
A residential apartment qualifies for the 1% effective rate if both conditions are met: carpet area up to 60 square metres in a metropolitan city or up to 90 square metres elsewhere, and gross amount charged up to ₹45 lakh. Houses built under specified central and state housing schemes also qualify.
The metropolitan cities for this purpose are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurugram and Faridabad), Hyderabad, Kolkata and Mumbai (the whole of the Mumbai Metropolitan Region). Everywhere else, including Pune, Ahmedabad and Lucknow, the 90 square metre limit applies.
Both tests must be met. A ₹44 lakh flat with a 70 square metre carpet area in Noida fails the area test and pays 5%. A ₹48 lakh flat with a 55 square metre carpet area in Pune fails the price test and pays 5%.
The price test uses the gross amount charged for the apartment, including amounts like parking or preferential location charges billed as part of it. A builder who splits the price to keep the 'flat' under ₹45 lakh does not change the result if the extras are part of the same supply.
Ready-to-move and resale: no GST
Paragraph 5 of Schedule III to the CGST Act treats the sale of land, and the sale of a building, as neither a supply of goods nor a supply of services. The exception in Schedule II makes construction taxable where any part of the consideration is received before the completion certificate is issued by the competent authority, or before first occupation, whichever is earlier.
In practice: if you pay the entire price after the completion or occupancy certificate is issued, there is no GST. If you booked during construction and paid instalments before the certificate, GST applies to those instalments. How a builder treats the balance paid after the certificate in such a booking varies; ask the builder to show, on the final demand, which amounts carry GST and on what basis, and have your adviser check it.
Buying a resale flat from its owner is not a supply by a business at all; there is no GST on the price. GST may still apply to the broker's commission (18%, if the broker is registered).
Land and plots
Sale of land is outside GST. A plot bought from its owner carries no GST.
Developed plots sold by a developer are more complicated. Where the developer charges for developing infrastructure — roads, drains, electrification — on top of the land, those services can attract GST. Check the developer's invoice and agreement.
The one-third land deduction exists because a flat's price includes land, which GST does not tax. It is a deemed figure, applied whether the actual land value is higher or lower.
Commercial property
A shop or office under construction in a project that is not a residential real estate project is taxed at 18% GST, with the same one-third deduction for land, so the effective rate is 12% of the price, and the builder can claim input tax credit. Older articles describe this as '12% with ITC'; the effective result is the same.
Commercial units inside a residential real estate project (where commercial carpet area is not more than 15% of the total) follow the residential rate of 5% without input tax credit.
A GST-registered business buying an under-construction office may be able to claim the GST as input tax credit only in limited cases; credit on goods and services used for construction of immovable property is generally blocked under section 17(5) of the CGST Act. Ask your GST adviser before assuming you will recover it.
As with residential, a completed commercial unit sold after the completion certificate, and any resale, carries no GST.
PLC, parking, club and other charges
Preferential location charges (for a corner or park-facing unit), floor rise and car parking, when charged by the builder as part of the price of the under-construction flat, are part of the same composite supply and take the same rate as the flat — 5% (or 1%, if the flat is affordable within the limits).
Separately billed services such as club membership, advance maintenance and charges for services that are not part of the flat itself are generally taxed at 18%. Deposits that are genuinely refundable, like a sinking fund held for the society, are treated differently from fees; ask the builder to itemise.
Stamp duty and registration paid to the government are not subject to GST.
Ask for a demand letter that shows each component, the GST rate applied to it and the builder's GSTIN. You need it for your records and it is part of your cost of acquisition when you later sell.
GST on society maintenance charges
Services by a resident welfare association (RWA) or apartment owners' society to its own members, for common use, are exempt from GST up to ₹7,500 per month per member. The limit was raised from ₹5,000 to ₹7,500 in 2018.
Above ₹7,500 a month, CBIC Circular No. 109/28/2019-GST says the whole amount is taxable at 18%, not just the excess. The Madras High Court, in Greenwood Owners Association v. Union of India, took the view that only the excess over ₹7,500 is taxable. Expect your society to follow the CBIC position unless it is in a jurisdiction bound by a contrary ruling or a higher court settles the point.
The RWA also needs to be registered for GST only if its aggregate turnover exceeds ₹20 lakh a year. A small society collecting more than ₹7,500 per member but with total collections under ₹20 lakh does not have to register or charge GST.
Where a member owns two flats, the ₹7,500 limit is applied separately to each flat. Maintenance collected by the builder before handing over to the society is not an RWA-to-member service; it is generally taxable at 18%.
GST on rent
Renting a residential dwelling for use as a residence is exempt, except where it is let to a GST-registered person. From 18 July 2022, when a residential dwelling is let to a registered person, the tenant pays 18% GST under reverse charge. From 1 January 2023, this does not apply where the tenant is a registered proprietor who rents the dwelling in a personal capacity to live in, on their own account and not on behalf of the business.
Renting commercial property is taxable at 18%. Where the landlord is unregistered and the tenant registered, the tenant has paid that GST under reverse charge since 10 October 2024. The full position on commercial rent, including TDS, is in the guide on GST and TDS on commercial rent.
A residential flat let to a company for its staff to live in is the commonest case where residential rent attracts GST; the company pays it under reverse charge. A flat let to an individual salaried tenant does not attract GST.
Worked examples
Illustrative numbers only.
1. Under-construction flat in Pune, price ₹90,00,000, carpet area 85 square metres. Price is above ₹45 lakh, so not affordable. GST = 5% × ₹90,00,000 = ₹4,50,000, paid with each instalment in proportion (a 10% instalment of ₹9,00,000 carries ₹45,000 GST).
2. Under-construction flat in Indore, price ₹40,00,000 including parking, carpet area 58 square metres. Within ₹45 lakh and within 90 square metres (non-metro). GST = 1% × ₹40,00,000 = ₹40,000.
3. Under-construction flat in Noida, price ₹44,00,000, carpet area 70 square metres. Noida is in the metro list, so the limit is 60 square metres. Not affordable. GST = 5% × ₹44,00,000 = ₹2,20,000.
4. Under-construction office, price ₹1,20,00,000. GST = 18% × two-thirds of ₹1,20,00,000 = 18% × ₹80,00,000 = ₹14,40,000 (an effective 12%).
5. Ready flat bought after the occupancy certificate for ₹1,10,00,000, entire price paid after the certificate: GST nil. Stamp duty applies as usual.
6. Society maintenance of ₹8,000 a month per flat, society turnover over ₹20 lakh. CBIC view: 18% × ₹8,000 = ₹1,440 a month. Madras High Court view: 18% × ₹500 = ₹90 a month.
Common mistakes
Paying GST on a resale flat because the agent or seller asks for it. There is no GST on a resale.
Assuming a flat under ₹45 lakh is automatically affordable. The carpet area limit must be met too, and Noida, Gurugram, Ghaziabad and Faridabad count as metro.
Confusing the effective rate with the legal rate. Your invoice may show GST on two-thirds of the price; the result is still 5% or 1% of the whole.
Paying GST on instalments after the completion certificate without asking the builder to explain the basis.
Expecting a business to recover GST on buying an office as input tax credit; it is usually blocked.
Charging or paying GST on maintenance up to ₹7,500 a month to an RWA, or ignoring it when the limit is crossed.
Forgetting reverse charge when letting a flat to a GST-registered company.
This is general information, not tax or legal advice. Tax law, rates and forms change with each Finance Act; confirm how the rules apply to your own facts with a chartered accountant before you sign, pay or file.
Common questions
What is the GST rate on an under-construction flat?
5% of the price without input tax credit, or 1% for an affordable flat (carpet area up to 60 square metres in metros or 90 square metres elsewhere, and price up to ₹45 lakh). These rates were unchanged by the September 2025 GST rate changes.
Is GST payable on a ready-to-move flat?
No, if the entire price is paid after the completion or occupancy certificate (or first occupation). Payments made before the certificate attract GST.
Is there GST on a resale flat?
No. A sale by one owner to another is outside GST. Stamp duty and registration still apply, and a registered broker's commission carries 18% GST.
What is the GST on a commercial shop or office under construction?
18% on two-thirds of the price (an effective 12%), with input tax credit to the builder. There is no GST on a completed unit sold after the completion certificate or on a resale.
Is GST charged on land?
No. The sale of land is outside GST. That is why one-third of a flat's price is deducted as land value before GST is computed.
When is GST charged on society maintenance?
When the charge exceeds ₹7,500 per month per member and the society's annual turnover exceeds ₹20 lakh. The CBIC says the whole amount is then taxable at 18%; the Madras High Court held only the excess is taxable.
Is GST payable on house rent?
Not when the tenant is an individual living there who is not GST-registered. Since 18 July 2022, a GST-registered tenant pays 18% under reverse charge, except a registered proprietor renting in a personal capacity to live in (from 1 January 2023).
Is GST charged on car parking and PLC?
When charged as part of an under-construction flat's price, they take the flat's rate (5% or 1%). Separately billed services like club membership are generally 18%.
Sources
- Notification No. 11/2017-Central Tax (Rate) as amended by Notification No. 03/2019-Central Tax (Rate), effective 1 April 2019 — residential rates, affordable housing definition, one-third land deduction; cbic.gov.in; checked 2 October 2026
- GST Council, 33rd and 34th meetings (February–March 2019) — real estate rates; gstcouncil.gov.in; checked 2 October 2026
- GST Council 56th meeting and CBIC rate notifications effective 22 September 2025 (including Notification No. 15/2025-Central Tax (Rate)) — residential construction rates unchanged; checked 2 October 2026
- Central Goods and Services Tax Act, 2017: Schedule II paragraph 5(b), Schedule III paragraph 5, section 17(5); indiacode.nic.in; checked 2 October 2026
- CBIC Circular No. 109/28/2019-GST dated 22 July 2019 — RWA maintenance, ₹7,500 limit and ₹20 lakh turnover; Madras High Court, Greenwood Owners Association v. Union of India; checked 2 October 2026
- Notification No. 05/2022-Central Tax (Rate) (reverse charge on residential dwelling let to a registered person, from 18 July 2022) and Notification No. 15/2022-Central Tax (Rate) (proprietor exception, from 1 January 2023); checked 2 October 2026
- CBIC FAQs on real estate under GST; cbic-gst.gov.in
Last checked 2026-10-02.