In 2026 two Bengaluru buyers compared what looked like the same 60 lakh flat, one in a tower still under construction and one in a completed building down the road. On paper the prices matched. In practice the under construction flat carried an extra 3 lakh rupees of GST that the ready flat did not, because the completed home had already received its occupancy certificate. Neither buyer had factored this in at first, and it changed the comparison entirely. GST on a home purchase turns almost entirely on one question, whether the flat is still being built or already complete.

The short answer. You pay 5 percent GST on a standard under construction flat and 1 percent on an affordable one, in both cases without input tax credit, while a ready to move flat that already has its occupancy certificate carries no GST at all. The trade off buyers miss is that this can add lakhs to an under construction purchase that a ready home avoids, so the construction stage, not just the sticker price, decides the true cost of the flat.

How much GST applies, and to what?

GST applies to under construction homes, at 5 percent for a standard flat and 1 percent for an affordable one, and neither rate carries input tax credit for the buyer. The tax is charged on the value of the under construction property, so on a standard flat still being built it adds a real slice to the cost. What it does not apply to is a completed home. Once a building has received its occupancy or completion certificate, the sale is treated as the sale of a finished property and no GST is levied on the buyer. This single distinction, under construction versus complete, is the hinge on which the whole question turns, and it is why two similar flats can carry very different tax.

The absence of input tax credit is worth understanding too. In many other parts of the economy a business can set off the GST it paid on its inputs against the GST it charges. For a home buyer under these rates, that offset is not available, so the 5 percent or 1 percent you pay is a straight cost rather than something recovered elsewhere. This is why the headline rate is the number that matters to you, and why an under construction flat should always be compared with a ready one on an all in basis that includes the tax.

Why does a ready flat escape GST entirely?

A ready to move flat with its occupancy certificate escapes GST because, in the eyes of the tax, it is no longer a construction service but a finished property. GST is designed to tax the construction of a building, so once that construction is certified complete, the transaction moves outside its scope. This is one more reason the occupancy certificate matters so much to a buyer, a point we make in our guide on why you should insist on the occupancy certificate before possession. The certificate is not only proof that a home is legal to live in. It is also the marker that a purchase has crossed from the taxed side of the line to the untaxed one.

This has a practical effect on how buyers weigh a nearly finished project. A flat that is weeks away from its occupancy certificate still attracts GST if you buy before the certificate is issued, while the same flat bought just after would not. That does not always make waiting the right choice, since prices and availability move too, but it does mean the GST line should be part of the conversation when a project is close to completion, rather than an afterthought discovered on the final cost sheet.

What counts as affordable for the lower rate?

The 1 percent affordable rate applies only when a flat meets both a size limit and a price limit, not just one. In a metro such as Bengaluru the carpet area must not exceed 60 square metres and the price must not exceed 45 lakh rupees. In a non metro location the area limit is more generous at 90 square metres, but the same 45 lakh price cap applies. Both conditions have to be satisfied together, so a compact flat priced above 45 lakh, or a cheaper flat that is larger than the carpet area limit, falls into the standard 5 percent bracket. Because the difference between 1 and 5 percent is large in rupees, it is worth checking exactly where your flat sits against both limits rather than assuming a low price alone qualifies it.

The carpet area limit is measured as carpet area, the usable space within the walls, not the larger super built up area that a brochure often quotes. This matters because a flat marketed at a super built up size above the limit can still fall within it on carpet area, and the reverse can also happen. Confirming the carpet area figure the builder is using, and how it compares with the 60 square metre metro limit, is the surest way to know which GST rate genuinely applies to your home.

How do the rates compare at a glance?

The clearest way to hold the rules together is to line up the property types against the rate each attracts. The table below does that.

Read the bottom two rows together. A ready flat and a plot both sit outside GST, while an under construction flat carries it, which is why the tax often quietly favours a completed home or a plotted purchase over one still being built.

How does GST fit the rest of your buying costs?

GST is one line among several, and it should be planned alongside the others rather than discovered on the cost sheet. On an under construction flat, GST sits on top of the price and beside the stamp duty and registration, the loan costs, and the builder charges such as parking and corpus. Note that GST and stamp duty are separate taxes that both apply, so an under construction purchase can carry both of them at the same time, which surprises many first time buyers. The maintenance you pay later can also attract GST in its own right, a subject we cover in our guide to GST on apartment maintenance charges. Seeing all of these together, rather than one at a time, is what gives you the true all in cost of a home rather than a headline that flatters the price.

How should a buyer check the GST on a purchase?

Treat GST as a number to confirm, not assume, and check it against the specific flat you are buying. Work through the following steps before you finalise a cost sheet.

1. Confirm whether the flat is under construction or already has its occupancy certificate.
2. If it is ready with the certificate, expect no GST on the purchase.
3. If it is under construction, check whether it meets both the affordable area and price limits.
4. Apply 1 percent if it qualifies as affordable, or 5 percent if it is standard.
5. Ask the builder for a written cost sheet showing the GST as a separate line.
6. Remember that stamp duty and registration are separate and apply in addition to GST.
7. Total the price, GST, duty and other charges to find the real cost of the home.

Run this on the specific launch you are weighing. For an under construction project such as Brigade Cherry Blossom, ask whether your flat is standard or affordable, and add the right GST rate to the price so the figure you compare against a ready home is a true one. The tax is not something to argue about at the counter. It is something to know before you choose, because on a large purchase the difference between the taxed and the untaxed side of the line can run into several lakh rupees.

Frequently asked questions

How much GST do I pay when buying a flat?

On an under construction flat you pay 5 percent GST for a standard home and 1 percent for an affordable one, in both cases without input tax credit. A ready to move flat that already has its occupancy certificate carries no GST at all, so the stage of construction, not the price alone, decides what you pay.

Do I pay GST on a ready to move flat?

No, provided the flat has received its occupancy or completion certificate. A ready to move home with that certificate is treated as complete and falls outside GST, so the buyer pays none. This is one reason the occupancy certificate matters so much, since it marks the point at which a purchase stops attracting GST.

What counts as affordable housing for the 1 percent GST rate?

For the 1 percent affordable rate the flat must meet a carpet area limit and a price limit together. In a metro such as Bengaluru the carpet area must not exceed 60 square metres and the price must not exceed 45 lakh rupees. Miss either limit and the home is treated as standard, attracting the 5 percent rate instead.

Is GST charged on buying a plot of land?

No. The purchase of land by itself is outside GST, so buying a plot does not attract it. GST applies to under construction buildings, not to bare land, which is why a plotted purchase and an under construction flat are taxed very differently. Always confirm what you are buying and its stage before assuming a GST figure.

The GST rates and the affordable housing limits described here reflect the rules for a flat purchase in 2026, as summarised in this guide to GST on a flat purchase. Because rates and thresholds can be revised, always confirm the current GST and your flat's category with the builder's written cost sheet before you commit.

Last updated 2026-08-11. PropNewz Team.