GST on Residential Property in India 2026: Rates, Rules and Real Examples

Few things confuse home buyers more than the tax on a flat, so let’s clear it up. GST on residential property in 2026 depends on one thing above all: whether the home is still under construction or already complete. Get that distinction right and the rest — the 1% and 5% rates, the “no input tax credit” rule, and the exemptions — falls neatly into place. This guide explains the rates with worked examples.

The single rule that decides everything

GST is a tax on the supply of goods and services. When a builder is still constructing your flat and sells it to you, that counts as a supply of construction service — so GST applies. Once the building has received its completion certificate (or occupancy certificate) and is ready to move in, selling it is treated as a sale of immovable property, which is outside GST.

In short: under-construction = GST applies; ready-to-move with a completion certificate = no GST. If you are weighing the two, our guide on under-construction vs ready-to-move flats covers the wider trade-offs.

GST rates on residential property in 2026

The rates introduced from 1 April 2019 continue to apply. The catch is that these lower rates come without input tax credit (ITC) — the builder cannot pass on credit for the GST paid on cement, steel and other inputs.

Note that GST is charged on the value of the flat but not on the land component; for apartment sales the law provides a standard one-third deduction of the total value towards land, which is already baked into the effective 1%/5% rates.

What counts as “affordable housing”?

The 1% rate is not automatic — the home must meet the government’s definition of an affordable residential unit. Both conditions below must be satisfied:

• Value: the total consideration does not exceed ₹45 lakh, and
• Carpet area: up to 60 sq. m. (about 645 sq. ft.) in metropolitan cities, or up to 90 sq. m. (about 968 sq. ft.) in non-metro cities.

Both the value and the size cap must be met. A flat priced at ₹42 lakh but larger than the carpet-area limit does not qualify, and neither does a compact flat priced above ₹45 lakh. Because the definition hinges on carpet area, it pays to understand exactly what that means — see RERA carpet area and our explainer on carpet area vs built-up vs super built-up.

How to calculate GST on a flat purchase

The calculation is straightforward once you know the rate. GST is applied to the agreement value of the under-construction flat.

Example 1 — affordable flat

Agreement value: ₹40,00,000; carpet area 55 sq. m. in a metro. This meets both affordable conditions, so GST at 1% = ₹40,000.

Example 2 — non-affordable flat

Agreement value: ₹90,00,000 (under construction). GST at 5% = ₹4,50,000.

Example 3 — ready-to-move flat

Agreement value: ₹90,00,000, but the project already has its completion certificate. GST = Nil. You pay only stamp duty and registration charges.

Remember that GST is separate from stamp duty and registration, which every buyer pays regardless — see, for example, our guides to registration costs in Pune.

Common questions the rate table doesn’t answer

• Is GST applicable on a ready-to-move flat? No, provided the completion or occupancy certificate has been issued before the sale. This is a major reason buyers favour ready homes.
• What about GST on materials? Under the September 2025 “GST 2.0” rationalisation, cement moved from the 28% slab to 18%, which lowers builders’ input costs. But since the 1%/5% property rates already exclude ITC, this does not directly change what you pay as GST on the flat.
• Preferential location and parking charges? Amounts a builder charges for a preferred floor, view or parking are generally taxed at the same rate as the flat when bundled with it.
• Maintenance / society charges? Monthly maintenance above the prescribed threshold can attract GST at 18% separately — this is a recurring charge, not part of the purchase.

Buyer takeaways

1. Confirm the project’s status in writing — under construction or completion-certificate issued — before you sign.
2. Check whether your flat truly meets both affordable conditions if the builder quotes 1%.
3. Ask for a clear break-up of price, GST, stamp duty and registration.
4. Verify current rates and definitions on the official GST portal or with your CA before closing, as thresholds can be revised.

Browse verified, RERA-registered residential projects to compare under-construction and ready options with their tax implications.

Frequently Asked Questions

This article is for general information only and not tax advice; GST rates, thresholds and definitions can be revised, so verify current figures on the official GST portal or with a qualified chartered accountant before acting. Godrej Realty Homes is a property listings portal.