GST on under-construction apartments explained
GST on under-construction apartments is usually charged at 5% when you buy a home before the completion certificate or first occupation. Eligible affordable homes may have a lower GST rate of 1%. GST is usually not charged on a completed home when the full payment is made after the completion certificate or first occupation. Before buying, check the GST rate, payment plan, and latest tax rules with the builder.
For example, if you buy a home at Sattva Jodhani, an upcoming residential project spread across 6 acres by Sattva Group in KIADB Bagalur, North Bangalore, the 5% GST can increase your construction payment costs. The project offers 750 luxury flats with an average price of ₹1.21 crore. It is in pre-launch as of August 2026, with the launch planned for November 2026 and possession expected by December 2031. RERA registration is also in progress. Knowing the GST rules can help you plan your total home-buying budget better.
What Is GST on an Under-Construction Apartment?
GST on an under-construction flat is a tax on building services provided by developers during construction.
When you buy a home before it is built, the law treats the builder as a service provider. Therefore, GST applies to the property price fixed in your payment schedule.
What Is the GST Rate on Under-Construction Flats?
The GST rate on under-construction flats is 5% for standard homes and 1% for qualifying affordable housing.
- Standard Flats: Taxed at 5% GST without Input Tax Credit (ITC).
- Affordable Flats: Taxed at 1% GST without ITC if the unit meets price and size limits.
When Is GST Charged on a Flat?
GST is charged on a flat whenever you pay the builder before the project gets an official Completion Certificate (CC).
Builders collect this tax in parts alongside your construction installment plan. Once a building gets its completion certificate, new buyers pay zero GST.
Is GST Applicable on a Ready-to-Move-In Apartment?
GST does not apply to ready-to-move-in flats if you pay the entire cost after the builder gets a Completion Certificate.
- Under-Construction Flat: Subject to 5% or 1% GST.
- Ready Flat (Post-CC): Subject to 0% GST.
Buying a completed home removes the GST expense from your final bill.
How Is GST Calculated on an Under-Construction Apartment?
GST is calculated by multiplying the base agreement value of your flat by the applicable tax rate.
If an under-construction flat has a base price of ₹1 Crore, the quick tax calculation looks like this:
- Base Flat Price: ₹1,00,00,000
- GST Rate (5%): ₹5,00,000
- Total Payable Amount: ₹1,05,00,000
Does GST Apply to the Booking Amount?
Yes, GST applies to the initial booking deposit or Expression of Interest (EOI) amount paid for an under-construction flat.
Because booking payments form part of the total flat cost, developers add the applicable GST rate to this initial payment.
GST Payment Schedule for Under-Construction Apartments
GST is collected step-by-step with your construction-linked plan rather than in one huge lump sum.
Your builder sends installment bills at major construction stages, listing base fees and GST separately:
- Booking Stage: GST is applied to the initial booking fee.
- Slab Stage: GST is applied to structural building milestones.
- Possession Stage: GST is applied to final handover dues.
Does GST Apply to Maintenance Charges?
GST applies to monthly society maintenance charges only if your bill exceeds ₹7,500 per month.
- Up to ₹7,500 Monthly: Fully exempt from GST.
- Above ₹7,500 Monthly: Attracts 18% GST on the total maintenance amount.
Is GST Included in the Property Price?
No, property ads usually show the base rate and exclude GST, stamp duty, and registration charges.
Developers show base rates in marketing ads, so buyers must ask for a full cost sheet to see all extra taxes clearly.
GST and Other Charges on an Apartment Purchase
GST applies to building costs, but other government fees follow separate state tax rules during a flat purchase.
- Base Flat Cost: Attracts 5% GST (1% for affordable flats).
- Stamp Duty & Registration: State taxes calculated separately without GST.
- Monthly Maintenance: Attracts 18% GST if over ₹7,500 monthly.
Example: GST on a Luxury Under-Construction Apartment
Calculating tax on a luxury residence helps buyers understand overall acquisition costs early.
Consider a luxury flat at Sattva Jodhani in KIADB Bagalur, North Bangalore, with an average base rate of ₹1.21 Crore:
- Base Flat Value: ₹1,21,00,000
- GST @ 5%: ₹6,05,000
- Subtotal Cost: ₹1,27,05,000
Project Overview: Sattva Jodhani, KIADB Bagalur
- Location: Prime spot within North Bengaluru's KIADB Aerospace SEZ industrial belt, KIADB Bagalur, North Bangalore.
- Land & Structure: 6 Acres (Density: 125 Flats/Acre) featuring 750 luxury apartments and ~₹1,000 Cr stated inventory value.
- Developer: Sattva Group (Est. 1993, CRISIL AA/Stable rating).
- Home Sizes & Types: 2 BHK (~1,350 sq ft) and 3 BHK (~1,610 sq ft).
- Starting Price: Average price of ₹1.21 crore.
- Connectivity Details:
- KIADB Aerospace SEZ: Directly integrated within the 3,000-acre industrial cluster.
- Kempegowda International Airport: 10.3 km away
- NH-7: ~9 km away.
- Bagalur: 11.5 km away (16 mins).
- Hebbal: 33.9 km away (49 mins).
- Manyata Tech Park: 35 km away (48 mins via Bellary Road / NH-44).
- Satellite Town Ring Road (STRR): Connects Bagalur to 12 satellite towns (full completion targeted for 2026).
- USPs:
- Aerospace SEZ proximity cutting down daily commutes for high-tech employees.
- Strong developer track record with over 142 completed projects (~69-80 million sq ft).
- Strategic growth corridor near STRR and upcoming Bengaluru-Vijayawada Expressway (targeted for 2028).
- Proposed metro rail corridor integration for seamless connectivity.
- Important Dates: Pre-launch status as of August 2026, Scheduled Launch in November 2026, Development Timeline of ~61 months, and Possession Date in December 2031.
- RERA Status: Registration process is currently underway, and the official RERA registration number will be published upon approval.
Apartment Plans: Finding Your Ideal Layout
The project offers a high-density, high-rise architectural format tailored for modern urban buyers.
| Variant Type | Configuration | Size Range (sq. ft.) | Best Suited For | Key Layout Highlight |
|---|---|---|---|---|
| 2 BHK Unit | 2 Bed + 2 Toilet | ~1,350 sq. ft. (average blended footprint) | Nuclear Families & Tech Professionals | High rental demand near KIADB industrial belt |
| 3 BHK Unit | 3 Bed + 2/3 Toilet | ~1,610 sq. ft. (upper range) | Growing Families | Optimized space for multi-year capital appreciation |
GST on Affordable Housing
Affordable housing projects enjoy a lower 1% GST rate to keep entry-level homes within reach.
To qualify for this 1% GST rate, the apartment must meet clear limits:
- Metro Cities: Carpet area up to 60 sq. meters and price up to ₹45 lakh.
- Non-Metro Cities: Carpet area up to 90 sq. meters and price up to ₹45 lakh.
Does GST Apply to the Land Portion?
GST does not apply separately to the land value of an under-construction apartment project.
Tax rules automatically deduct 1/3rd of the total property value toward land cost. The 5% GST
rate applies directly to the final combined property price.
Can Homebuyers Claim GST Paid on an Apartment?
No, individual homebuyers cannot claim back or deduct the GST paid on a residential flat purchase.
The reduced 1% and 5% GST rates are set up without Input Tax Credit for end buyers, making the tax a final purchase cost.
What Should Buyers Check Before Paying GST?
- Check CC Status: Confirm if the project has received a Completion Certificate.
- Verify Builder GSTIN: Check the developer's tax ID number on their official bills.
- Ask for a Cost Sheet: Get a written statement showing base price, GST, and state duties separately.
Common Mistakes Buyers Make
- Looking Only at Advertised Prices: Forgetting that base prices exclude GST and registration fees.
- Paying GST on Ready Flats: Paying tax on ready homes that already have a Completion Certificate.
- Skipping Milestone Reviews: Failing to check tax line items on individual construction bills.
Key Takeaways
- Standard GST Rates: Under-construction flats carry 5% GST, while eligible affordable homes carry 1% GST.
- Ready Flat Exemption: Completed homes with a Completion Certificate are completely free from GST.
- Budget Planning: Buyers looking at luxury projects like Sattva Jodhani should add 5% GST to their base property cost when planning payments.
FAQs
The standard GST rate is 5% for regular residential homes and 1% for eligible affordable housing units.
No, GST is not charged if you buy a ready-to-move flat after the builder receives a Completion Certificate.
No, individual homebuyers cannot claim a tax refund or input credit on residential flat purchases.
Usually no. Builders advertise the base property price and list GST, stamp duty, and registration fees separately.
No, GST and stamp duty are separate taxes. Stamp duty and registration fees are paid directly to the state government without GST.
