In a sample flat off the Outer Ring Road in Kokapet, a Hyderabad buyer signed a booking form for a 1,450 square foot apartment priced at 92 lakh in July 2026, then stopped at one line on the cost sheet: GST at 5 percent, another 4.6 lakh on top of everything else. She had budgeted for stamp duty and registration, but not for this. Goods and Services Tax on an under construction home is one of the most misread numbers in an Indian property purchase, and in Hyderabad it quietly decides whether a deal fits your budget or breaks it.

The short answer. An under construction residential flat in Hyderabad attracts 5 percent GST for a normal home and 1 percent for an affordable home, in both cases with no input tax credit passed to you, while a ready to move flat that already holds its completion or occupancy certificate carries no GST at all. The trade off is real: buying under construction can mean a lower sticker price and a payment plan, but you add 1 percent or 5 percent GST that a ready to move buyer never pays. GST is a central tax, so a Hyderabad buyer pays exactly the same rate as a buyer in Bengaluru or Mumbai.

How much GST will I actually pay on a Hyderabad flat?

You pay 5 percent of the price for a standard under construction flat and 1 percent if the home qualifies as affordable, according to the rate structure that has applied to residential real estate since 2019, summarised by Razorpay. On a 92 lakh apartment the 5 percent rate works out to about 4.6 lakh, paid to the builder in the same instalments as the flat itself. The rate is charged on each demand the builder raises while the building is still going up, so as construction milestones fall due, GST is added to each payment and collected by the developer, who then deposits it with the government.

Two points catch buyers out. First, GST is billed on the amount you pay the builder for the home, and the headline 5 percent and 1 percent figures already build in the standard one third deduction the law allows for the value of land, so you do not deduct land value again. Second, the rate does not change with your loan, your city zone, or your negotiation. It is fixed nationally, which is why a Hyderabad buyer and a Chennai buyer pay the identical percentage on a comparable under construction home.

What counts as affordable housing for the 1 percent rate?

An affordable home qualifies for 1 percent GST only if it meets both a size limit and a price limit at the same time. As Razorpay sets out, the flat must have a carpet area up to 60 square metres in a metropolitan city or up to 90 square metres in a non metro city, and its price must not exceed 45 lakh. Hyderabad is treated as a metropolitan region for this test, so the tighter 60 square metre carpet area cap applies here.

Both conditions are joint, not either or. A compact flat priced at 52 lakh fails the price test and moves to 5 percent, and a cheaper but larger flat that crosses the carpet area cap also moves to 5 percent. Because the rule turns on carpet area rather than the larger super built up number a brochure advertises, it pays to ask the builder for the RERA carpet area in writing before assuming the 1 percent rate applies. Our guide on carpet area versus super built up area explains why the two numbers differ and which one the law counts.

Why is there no GST on a ready to move flat?

A completed flat that already has its occupancy or completion certificate carries no GST because, once construction is certified complete, the sale is treated as a transfer of finished property rather than a supply of construction service. Razorpay states plainly that GST does not apply to ready to move properties with a valid occupancy certificate, as they are classified as completed goods rather than a service. In practice this means the certificate date is the dividing line: pay the builder before the certificate is issued and GST applies, buy after it and the same flat carries none.

This is one of the clearest cost differences between an under construction and a ready to move home, and it is worth putting a number on. On a 92 lakh home, choosing a certified ready to move unit over an under construction one at 5 percent can save roughly 4.6 lakh in tax alone. Confirm the certificate genuinely exists rather than taking a sales claim on trust, and check it against the municipal record.

Does GST apply to the whole price or only part of it?

GST applies only to what you pay the builder for the under construction home, not to charges that sit outside that supply. The 5 percent and 1 percent rates already account for the land portion through the standard deduction the scheme builds in, so you are not taxed separately on land value. Payments you make before the builder raises a demand, or after the completion certificate is issued, fall outside the tax.

Is GST charged on top of stamp duty and registration?

Yes, GST is a separate central tax and it does not replace the state stamp duty and registration fee you pay when the sale deed is registered. The two are levied by different governments for different reasons: GST is a tax on the construction supply collected by the builder, while stamp duty and registration are state charges collected at the sub registrar office when title is formally transferred to you. A buyer therefore budgets for both, not one instead of the other.

Sequence matters for cash planning. GST is paid to the builder through the construction period as demands fall due, whereas stamp duty and registration are paid later, at the point of registering the deed. Reading the difference between your booking agreement and the final deed helps here, and our explainer on the agreement to sell versus the sale deed shows where each cost lands in the timeline.

Can I claim input tax credit to reduce the cost?

No, the 5 percent and 1 percent residential rates come with input tax credit switched off, so you cannot reduce your outgo by claiming credit for the tax the builder paid on cement, steel, or services. This was the deliberate design when the rates were lowered: developers gave up the credit chain in exchange for the lower headline rate, and buyers pay a simple flat percentage with nothing to reclaim.

Commercial under construction property is different. As Razorpay notes, under construction commercial units attract 12 percent GST, and there input tax credit is available, which is why a shop or office is taxed on a different logic from a home. For a residential buyer the practical takeaway is simple: treat the 5 percent or 1 percent as a firm cost, because there is no credit mechanism to soften it later.

What should a Hyderabad buyer check before paying GST to a builder?

Run through a short verification before you accept any GST line on a cost sheet, because the rate depends entirely on the stage of the project and the type of home. The checklist below keeps you from overpaying or being surprised.

1. Confirm whether the flat is under construction or ready to move, since only under construction homes carry GST.
2. If it is ready to move, ask to see the occupancy or completion certificate, because that certificate is what removes GST.
3. Check the RERA carpet area and the price against the 60 square metre and 45 lakh limits to see if 1 percent applies.
4. Ask the builder to confirm the rate in writing, either 1 percent or 5 percent, before you sign the booking form.
5. Insist on a tax invoice for every demand that shows the GST amount separately from the base price.
6. Remember that GST is extra to stamp duty and registration, and budget for all three together.
7. Verify the builder is depositing the GST it collects by checking the invoice carries a valid GST identification number.

Treated as a routine, these seven steps take an afternoon and can protect several lakh of your budget. For the exact current wording of the rates and the affordable housing conditions, the official reference is the Central Board of Indirect Taxes and Customs GST portal at cbic-gst.gov.in, which publishes the notifications that set these rates.

For context on a related buyer side tax that also depends on the price of your home, our guide on TDS under Section 194-IA explains the 1 percent deduction a buyer must make above 50 lakh, drawing on the Income Tax Department guidance. If you are comparing specific under construction options in the west of the city, a project such as One by MSN in Kokapet is the kind of address where these GST rules apply in full while the towers are still rising.

GST is not a number to discover at the signing table. Once you know your flat is under construction, know its carpet area, and know whether a certificate has been issued, the rate is entirely predictable, and you can plan for it as you plan for the down payment. In Hyderabad, where much new supply sells before completion, that single percentage often decides whether a purchase stays inside budget.

Frequently asked questions

How much GST do I pay on an under construction flat in Hyderabad?

A standard under construction flat attracts 5 percent GST, and an affordable home attracts 1 percent, with no input tax credit in either case. On a 92 lakh flat, 5 percent adds about 4.6 lakh, paid to the builder alongside the flat instalments as construction milestones fall due.

Is there GST on a ready to move flat in Hyderabad?

No. A completed flat that already holds its occupancy or completion certificate carries no GST, because the law treats it as finished property rather than a construction service. The certificate date is the dividing line between a taxed under construction sale and a tax free ready to move one.

What makes a home affordable for the 1 percent GST rate?

The flat must meet both limits together: a carpet area up to 60 square metres in a metro city like Hyderabad, and a price no higher than 45 lakh. If either limit is crossed, the rate moves from 1 percent to the standard 5 percent.

Is GST charged on top of stamp duty and registration?

Yes. GST is a central tax collected by the builder during construction, while stamp duty and registration are separate state charges paid at the sub registrar office when the deed is registered. A buyer budgets for all three, not one in place of another.

Last updated 2026-08-03. PropNewz Team.