Total cost
GST on under-construction property: a general explanation and where to check
How GST generally applies to under-construction flats and why it is usually absent on completed property, with the official sources to check for the current rate. Not tax advice.
Short answer
GST generally applies to under-construction residential apartments. How it applies can depend on the stage of the project, for example whether a completion certificate has been issued or the flat has been occupied, so check the current rule. Rates and conditions are set by notifications and have changed, so this guide names the official sources instead of printing a rate. It is not tax advice.
What this article does and does not do
Goods and Services Tax on property is a subject where rates, conditions and exemptions are set by notifications and have been revised in the past. We therefore describe the general pattern, name the official sources, and ask you to check the current rate instead of printing a number that may be out of date. This is not tax advice, and a qualified tax professional should look at your own case.
The general pattern
Our own guide, based on the GST Council notification cited there, says that GST applies to under-construction residential apartments, at a concessional rate without input tax credit and at a lower rate for affordable housing, and that the position can differ for a sale made after the completion certificate has been issued or after first occupation. We could not confirm the exact condition from an official page, so check the current notification. The general reasoning is that a purchase of a flat in a building that is still being built is treated as a supply of a construction service, while a sale of a completed building is treated differently.
The practical point for a buyer is the stage at which you buy. The same flat can carry a different tax cost depending on whether the completion certificate has been issued, or the flat first occupied, on the date of the supply, so ask the seller to explain the position in writing on your cost sheet.
Input tax credit and why the rate depends on conditions
The concessional rate for residential apartments has come with conditions, notably that the builder does not claim credit for tax paid on inputs. The notification has also treated the taxable value after allowing for the land, and for projects that were already under way when the concessional rate began, the builder had a one-time choice of regime. That is the reason you may see different effective rates or different wording on different cost sheets. Ask which regime applies to your project and where the notification is that supports it.
Whether a flat counts as affordable housing for the purposes of the lower rate depends on criteria set in the notification, which have included limits on size and on value. Check the current criteria and compare them with your flat's declared carpet area and price before you accept a quote.
How GST appears on your cost sheet
A cost sheet usually shows the base price and other charges, followed by GST on the taxable amount. Because tax can apply to charges other than the base price, ask whether it is being charged on parking, club membership, floor rise and similar items, and ask for a calculation example. Our guide on the total cost checklist lists the common items.
Also ask how the tax is shown in the payment schedule. For an under-construction purchase paid in stages, tax is normally collected with each instalment.
- Which GST rate and conditions the builder is applying, and the notification relied on.
- Which charges in the cost sheet are taxed.
- Whether any amount is shown as inclusive of tax.
- What happens to the tax if the completion certificate is issued before your final instalment.
Where to look for official information
The GST Portal, the website of the Central Board of Indirect Taxes and Customs and the GST Council's site publish notifications, circulars and frequently asked questions, including FAQs on the real estate sector. Search the notifications on rate for construction services and read the latest amendments. Note the date of each notification you rely on and keep it with your papers.
State-level information on stamp duty and registration is separate, and our article on Kaveri covers that. GST does not replace those charges. They are different taxes on different events in the purchase.
Questions to ask before you pay
A short script helps you get clear answers without arguing about rates. Ask the seller to put each answer in an email or on the cost sheet.
- What is the status of the completion or occupancy certificate for my tower today?
- Which tax treatment applies to my payment schedule?
- Is the tax on each instalment shown separately?
- If the rules change before my last instalment, who bears the difference, and where does the agreement say so?
Resale and completed property
If you are buying a flat that is already complete, the question is whether the completion or occupancy certificate has been issued and when. A resale from an individual owner is a different kind of transaction from a first sale by a builder, and the tax treatment can differ. Ask the seller for the certificate, ask your adviser how the transaction is treated, and do not assume that the cost sheet from a previous deal applies to yours.
Where a builder is still selling unsold flats in a building that has just received its certificate, the date of the certificate relative to the date of your agreement can change the tax position. This is a good example of why we ask you to get the treatment in writing, with the notification relied on.
A note on income tax
Buying a flat can have income tax consequences, both on the loan and on a later sale. We do not give guidance on those, since they depend on your circumstances and the law as it stands in a given year. Speak to a chartered accountant or other tax adviser.
What we cannot tell you
- We cannot tell you the GST rate that applies to your flat today. Check the latest notification and ask your builder to cite it.
- We cannot say whether a particular project qualifies as affordable housing or whether the builder may claim input credit. Those depend on the notification and the facts.
- This is not tax advice. A qualified professional should review your own situation.
Common questions
- Is GST charged on an under-construction flat?
- GST generally applies to under-construction residential apartments. The position can differ after the completion certificate is issued or after first occupation, so check the current rule with the builder and a tax adviser.
- Where do I find the current GST rate?
- On the GST Portal and the CBIC website, which publish notifications and circulars. Check the latest amendment and its date.
- Does GST replace stamp duty?
- No. Stamp duty and registration charges are separate state levies paid when the sale deed is registered.
- What should the cost sheet show about tax?
- The rate applied, the charges it applies to, and whether any figure is inclusive of tax.
Sources
Read against these official sources on 18 Oct 2026. Rates, fees and procedures change, so check the current position on each site.