When you buy a home under construction in India, you pay GST of 5% on the price, or 1% if it is an affordable home. A ready home that already has an occupancy certificate attracts no GST, and neither does land sold as a plot. Some extra charges, such as club membership and maintenance, are taxed separately at 18%.
GST rates on homes at a glance
- Under-construction flat or villa: 5% of the agreement value, without input tax credit.
- Affordable home under construction: 1%. A home is affordable if its carpet area is up to 60 sq m in a metro city such as Bengaluru, or 90 sq m elsewhere, and its price is up to ₹45 lakh.
- Ready home with an occupancy or completion certificate: no GST.
- Resale of a completed home: no GST.
- Plot of land: no GST on the land itself.
Why the rate is 5% and not 18%
A home price includes the land, and land is outside GST. The government builds this into the rate: one-third of the price is treated as land, and tax is charged on the rest, which works out to an effective 5% of the full agreement value. Developers cannot claim input tax credit at this rate, so the 5% is a final cost.
Which extra charges attract GST
- Preferred location, floor rise and car parking charges: usually part of the home price, so taxed at the same 5% or 1%.
- Club membership, maintenance and other services billed separately: usually 18%.
- Stamp duty and registration: these are state levies, not GST, and are paid on top.
GST on plots and villas
Selling land is not a supply of goods or services, so a plain plot sale has no GST. But if a developer charges separately for developing the layout, such as roads, drainage or amenities, those charges can attract GST. A villa sold before completion is treated like any under-construction home at 5%.
How GST changes the true cost of a home
On a ₹1.2 Cr under-construction flat, GST adds about ₹6 lakh. On the same flat bought ready with an occupancy certificate, there is no GST, which partly explains why ready homes are priced higher. You can compare both options on our pages for under-construction projects and ready to move homes.
Frequently asked questions
Is GST payable on a resale flat?
No. GST does not apply to the resale of a completed home. You pay only stamp duty and registration.
Is there GST on a plot in Bengaluru?
No GST applies to the land itself, but separately billed development or amenity charges can attract GST.
When is a home treated as ready for GST?
When the project has received its occupancy or completion certificate before the sale.
Can I claim the GST I paid on my home as a tax credit?
No. Individual buyers cannot claim input tax credit on a home bought for living or renting.
