Thinking of buying a flat? You’re not just paying for bricks and walls you may also be paying GST, depending on when and what you buy.
Many buyers get confused about when GST is charged on flat purchases, what rate applies, and how builders handle it. Here’s a simple, clear guide to help you understand GST on flat purchases in India (2025).
When is GST applicable on flat purchases?
✅ GST applies if you buy an under-construction flat.
✅ No GST if you buy a ready-to-move-in flat (where the builder has received the occupancy certificate before your purchase).
In short: Ready-to-move = No GST; Under-construction = GST applies.
Current GST rates on flats
• Affordable housing: 1% GST without ITC (Input Tax Credit).
• Other housing: 5% GST without ITC.
What qualifies as affordable housing?
🏠 Carpet area up to 60 sq.m in metros (90 sq.m in non-metros like Guwahati).
🏠 The value of the unit should be up to ₹45 lakhs.
This structure has been applicable since Notification No. 4/2019-Central Tax (Rate) dated 29th March 2019.
What does “without ITC” mean for buyers?
Builders cannot claim tax credit on GST paid on raw materials or services under the 1% & 5% rates.
This cost is usually adjusted in the flat pricing, so while the GST rate is lower, buyers effectively bear embedded costs.
Who collects and pays GST? The Builder’s Role
🛠️ Builders collect GST from buyers during payment instalments as per your agreement.
🛠️ Builders are responsible for depositing GST with the government.
🛠️ GST is charged on construction-linked payments (on each instalment, not on the entire value upfront).
What about parking, club membership, and maintenance charges?
If these are charged during construction, they may attract GST at the applicable rate.
However, stamp duty and registration charges are separate and do not fall under GST.
Can buyers claim GST refunds on flat purchases?
❌ No. Buyers cannot claim a refund of GST paid on flat purchases unless they are buying for business use under specific cases (rare for residential buyers).
✅ It becomes part of your effective cost unless the unit is ready-to-move-in.
Important Notifications for Reference
• Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017.
• Notification No. 3/2019 and 4/2019-Central Tax (Rate) dated 29th March 2019.
• CBIC FAQs on GST on Real Estate Sector (available on cbic-gst.gov.in).
What should buyers check before paying GST?
✅ Confirm if the flat has received an occupancy certificate.
✅ Check whether GST is included in the price or charged separately.
✅ Understand the GST rate applicable to your unit type.
✅ Collect GST payment receipts from the builder for your records.
Final Thoughts
Buying a home is a significant investment, and understanding GST helps you avoid surprises in your payment schedule.
If you are planning to buy an under-construction flat:
✔️ Check GST applicability with your builder.
✔️ Factor GST into your total cost planning.
✔️ Consult your CA or GST advisor if you have specific queries.
If you found this guide useful, share it with your friends planning to buy flats, and feel free to drop your suggestion & comments.