GST can materially affect the cost of an under-construction home, but its application depends on the property’s construction and payment status.

Under the current framework described by the Central Board of Indirect Taxes and Customs, the effective GST rate is generally 1% for qualifying affordable residential apartments and 5% for other residential apartments under the applicable new-rate structure. Input tax credit is not available to the buyer under these rates.

When does GST apply?

GST generally applies when a buyer purchases a residential unit while it is under construction and payment is made before the completion certificate or first occupation, whichever is earlier.

What about ready-to-move property?

A sale can fall outside GST when the entire consideration is received after the completion certificate or first occupation, whichever occurs earlier.

“Ready to move” in an advertisement is not enough. Buyers should ask for documentary evidence of completion or occupancy status and check when payment becomes due.

What qualifies as affordable housing?

Under the applicable GST framework, qualifying affordable housing is subject to prescribed conditions relating to carpet area and property value. Delhi-NCR—including Delhi, Noida, Greater Noida, Ghaziabad, Gurugram and Faridabad—is treated as a metropolitan area for the specified carpet-area condition.

Costs that remain payable

Even when GST does not apply to a completed property, buyers may still need to pay:

• Stamp duty and registration fee
• Brokerage
• Society or developer charges
• Legal-verification costs
• Loan-processing expenses
• Maintenance deposits
• Parking or amenity charges

Ask the developer for a tax invoice and written cost sheet. Confirm whether the quoted amount includes GST and whether tax is being applied to any additional services.