GST on a Hyderabad Flat: When You Pay 5 Percent, 1 Percent, or Nothing
GST hits only an under construction Hyderabad flat, at 5 percent or 1 percent for affordable homes. Ready flats with an occupancy certificate and resale flats carry none. A buyer guide.
Two buyers stand in the same Kokapet tower in September 2026, one signing for a flat still under construction, the other for a finished unit next door that already has its occupancy certificate. On paper the price is almost identical, yet one buyer will write a GST cheque worth several lakh and the other will write nothing at all. That single line, whether the building is legally complete on the day you buy, decides whether Goods and Services Tax touches your Hyderabad purchase. Most buyers discover the difference only when the cost sheet lands, so it is worth knowing before you choose.
The short answer. GST applies only to an under construction home: 5 percent for a normal flat and 1 percent for an affordable one, both charged with no input tax credit passed to you. A ready to move flat that already has its completion or occupancy certificate, and any resale flat, carry zero GST. The trade off is real: buying under construction can mean a lower sticker price and a payment plan, but you carry a 5 percent tax that a ready flat buyer simply avoids.
When does GST actually apply to a Hyderabad home?
GST applies only while a property is under construction, not after it is complete. The tax is levied on the sale of an under construction flat because that counts as a supply of construction service. Once the building receives its completion certificate or occupancy certificate, a sale of the finished flat is treated as a transfer of immovable property, which sits outside GST. So the trigger is not the building's age or how finished it looks, it is the legal status on your purchase date. A flat that is physically ready but has not yet received its certificate is still, in tax terms, under construction, and GST can apply. The reverse trap matters too: if a flat already holds its occupancy certificate on your purchase date, no GST is due, so a builder still adding it to your demand letter is charging you for something the sale no longer attracts. Always fix the certificate status in writing before you accept any GST line.
What are the 5 percent and 1 percent rates, and what changed in 2019?
Since the rates were reworked by the GST Council in 2019, an under construction home attracts 5 percent for standard housing and 1 percent for affordable housing, both without input tax credit. Before April 2019 builders charged a higher effective rate of around 12 percent but could claim input tax credit on their raw materials. The revised structure dropped the headline rate sharply but removed the builder's ability to pass that credit to you, so the 5 percent you see is a final, no credit number. As a buyer this makes your GST easy to compute, it is a flat percentage of the amount charged for the flat.
A quick example shows the weight of it. On a standard under construction flat where the builder charges 70 lakh for the unit, 5 percent GST is about 3.5 lakh, a sum most buyers underestimate when they compare a launch price against a ready flat. On an affordable flat charged at 40 lakh, the 1 percent rate is 40,000, far gentler. The gap between the two rates is large enough that confirming which bracket your flat sits in is one of the most valuable few minutes you will spend on the cost sheet.
Which Hyderabad flats count as affordable at 1 percent?
An affordable home qualifies for 1 percent only if it meets both a size cap and a price cap. The value must be up to 45 lakh, and the carpet area must be within 60 square metres in a metropolitan city such as Hyderabad, or up to 90 square metres in non metropolitan areas. Both tests must be satisfied together, so a 44 lakh flat with a carpet area above 60 square metres in the city does not get the 1 percent rate, and neither does a compact flat priced above 45 lakh. Because Hyderabad falls in the metropolitan bracket, the tighter 60 square metre limit is what applies inside the city.
How does GST compare across the types of flat you might buy?
The cleanest way to see the difference is side by side, because the same buyer can face three very different outcomes depending on what stage of home they choose. The table below sets out the rate and the credit position for each common case in Hyderabad.
| What you are buying | GST rate | Input tax credit |
|---|---|---|
| Under construction, standard flat | 5 percent | Not available to buyer |
| Under construction, affordable flat | 1 percent | Not available to buyer |
| Ready flat with completion or occupancy certificate | Zero | Not applicable |
| Resale or secondary market flat | Zero | Not applicable |
Read down the rate column and the pattern is plain: GST is a cost unique to the under construction path. It sits on top of the stamp duty and registration every buyer pays, which we cover in our guide to stamp duty and registration charges in Hyderabad, and it is separate again from the 1 percent income tax deducted at source that a buyer handles under Section 194-IA on a Hyderabad home. Three different levies, three different destinations, all landing in the same buying window.
Why is GST charged only on part of the price, and where does land go?
GST recognises that a flat price bundles land with construction, and the sale of land on its own is outside GST altogether. In the current scheme this land allowance is already built into the 5 percent and 1 percent figures, which are applied to the full agreement value of the flat. In other words, you should see GST charged as 5 percent, or 1 percent, of the total flat value, with the land adjustment already reflected in that rate, rather than the rate being stacked on construction and then land taxed again on the side.
Where buyers get overcharged is when a cost sheet applies the rate twice over or adds tax to a separately itemised land component. The defence is simple: ask the builder to show the GST computation in one line against the total consideration, check it reads 5 percent or 1 percent of that figure, and query anything that looks layered. If the arithmetic does not reduce to a clean percentage of the flat value, something has been added that should not be there, and it is worth pausing the payment until it is explained.
What should a Hyderabad buyer check before paying any GST?
Treat GST as a number to verify, not simply to accept from the cost sheet. The seven checks below protect you from paying tax you do not owe.
- Confirm whether the flat has a completion or occupancy certificate on your purchase date, because if it does, no GST is due.
- For an under construction flat, establish whether it is standard at 5 percent or affordable at 1 percent using both the price and carpet area tests.
- Check the carpet area against the 60 square metre city limit before accepting any 1 percent affordable claim.
- Ask the builder to show how GST is calculated and that it is not applied to the land share as well.
- Verify the builder's GST registration number appears on the demand letter and receipts.
- For a resale flat, confirm no GST is being added, since the secondary sale of a completed home is outside GST.
- Keep every GST receipt with your payment records, alongside your stamp duty and TDS proofs.
Does buying a ready flat to dodge GST always make sense?
Not automatically, because the GST saving is only one part of the total picture. A ready flat with its certificate avoids GST entirely, which on a standard flat is a 5 percent saving, and that is a genuine advantage. But under construction homes are often launched at lower base prices and let you pay in stages while the tower rises, which can suit a buyer whose funds build up over time. The honest comparison is total outflow and timing, not the tax line alone. A completed project such as Brigade Barcelona in Kokapet should be weighed on price, certificate status, and possession, with GST as one input among several rather than the whole decision. For a first time buyer the safest habit is to price both options fully, tax included, and let the total and the possession timeline decide, instead of chasing the tax saving on its own.
Frequently asked questions
Is there GST on a ready to move flat in Hyderabad?
No. A ready to move flat that has already received its completion or occupancy certificate carries zero GST, because its sale is treated as a transfer of immovable property rather than a construction service. The same applies to resale flats. GST only attaches to a home that is still legally under construction on the date you buy it.
What is the GST rate on an under construction flat?
An under construction flat attracts 5 percent GST for standard housing and 1 percent for affordable housing, in both cases without input tax credit for the buyer. These rates have applied since the GST Council reworked them in 2019. Your GST is simply a flat percentage of the amount the builder charges for the flat.
How does a Hyderabad flat qualify for the 1 percent affordable rate?
It must clear two tests at once. The price has to be up to 45 lakh, and the carpet area must be within 60 square metres because Hyderabad is a metropolitan city. A flat that breaches either the price cap or the size cap falls into the standard 5 percent bracket instead.
Is GST charged on the land value of my flat?
No. GST applies to the construction value, not the land portion, and the sale of land on its own is outside GST entirely. In the current scheme that land allowance is already built into the 5 percent and 1 percent rates, which are applied to the full flat value. Ask your builder to show the computation before you pay.
Last updated 2026-09-17. PropNewz Team.
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