GST on Real Estate — Overview
GST applies to the sale of under-construction properties but does not apply to the sale of completed/ready-to-move properties (where the Occupancy Certificate has been issued). Land sale is also exempt from GST.
💡 Quick Rule
Under-construction flat = GST applicable. Ready-to-move flat (OC received) = No GST. Land purchase = No GST.
GST Rates on Real Estate 2026
| Property Type | GST Rate | ITC Available? |
|---|---|---|
| Affordable housing (under construction) | 1% (without ITC) | No |
| Residential property — non-affordable (under construction) | 5% (without ITC) | No |
| Commercial property (under construction) | 12% (with ITC) | Yes |
| Ready-to-move residential property (OC received) | Nil / Exempt | N/A |
| Land sale | Exempt | N/A |
| Resale of old residential property | Exempt | N/A |
What is Affordable Housing Under GST?
A property qualifies as affordable housing if it meets both these criteria:
- Metro cities (Delhi, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad): Carpet area up to 60 sq metres AND value up to ₹45 lakh
- Non-metro cities: Carpet area up to 90 sq metres AND value up to ₹45 lakh
Both conditions (area AND value) must be satisfied simultaneously.
How GST is Calculated on Under-Construction Property
GST is levied on the total consideration received by the developer, including the land value component. However, a one-third deduction is allowed toward land value before computing GST.
Example Calculation:
- Flat sale price: ₹60 lakh
- Less: Land deduction (1/3): ₹20 lakh
- Taxable value: ₹40 lakh
- GST @ 5%: ₹2 lakh
🧮 Calculate GST on Property
Use our free GST Calculator to compute tax on your property transaction instantly.
GST Calculator →GST on Rental Income from Property
| Rental Type | GST Rate |
|---|---|
| Residential property rented to individual for residence | Exempt |
| Residential property rented to a registered business | 18% under RCM (tenant pays) |
| Commercial property rented to any person | 18% (if landlord is GST registered) |
| Hotel / guest house rooms above ₹7,500/day | 18% |
| Hotel rooms ₹1,001 to ₹7,500/day | 12% |
| Hotel rooms below ₹1,000/day | Exempt |
ITC for Real Estate Developers
From April 1, 2019, developers who opt for the new GST rates (1% / 5% without ITC) cannot claim ITC on construction inputs. Developers who opted for the old rates (8% / 12% with ITC) under the transition scheme can continue claiming ITC on ongoing projects.
⚠️ Works Contract for Construction
GST on works contract services for construction of residential complexes is 18%. Buyers cannot claim ITC on this. Only commercial property buyers can claim ITC on works contract services.
Frequently Asked Questions
I bought an under-construction flat in 2023 — do I pay GST?
Yes. GST is payable on instalments paid before the Occupancy Certificate is issued. Once OC is received, remaining instalments are GST-free.
Can I claim GST refund on a cancelled flat booking?
Yes. If the builder cancels or you cancel before possession, the GST paid on advance instalments can be claimed as refund from the builder who should then deposit it back to the government.
Is GST applicable on stamp duty and registration charges?
No. Stamp duty and registration are state-level charges and are separate from GST. Both are payable independently.
My landlord charges me GST on shop rent — can I claim ITC?
Yes — if you are a GST-registered business and the shop is used for your business, you can claim ITC on GST paid on commercial rent.