Two Bengaluru buyers set out with the same budget. One chose an under construction flat that was cheaper on paper and paid in stages as the tower rose; the other paid more for a finished flat she could walk through and move into the next month. A year on, the first buyer was still paying rent while waiting for possession, and had added 5 percent GST to her cost, while the second had no GST to pay and was already living in her home. Neither made a mistake. They simply weighed the same trade off, price against certainty, and landed in different places. Deciding between ready to move and under construction is one of the first real choices a buyer makes, and it turns on more than the sticker price.

The short answer. An under construction flat is usually cheaper on the base price and paid in stages, but it attracts GST, makes you wait, and carries a delay risk that RERA reduces but does not remove. A ready to move flat with an occupancy certificate carries no GST and gives immediate possession, but it usually costs more and offers less choice. The trade off, once you add GST and the rent you keep paying, is that the gap between the two is often smaller than it first looks, so compare the total cost and your need for certainty, not just the headline price.

What is the core difference for a buyer?

The core difference is that a ready to move flat is finished and can be occupied now, while an under construction flat is still being built and handed over later. A ready to move home, with its occupancy certificate in place, lets you inspect the actual flat, avoid GST, and move in almost at once. An under construction home, such as a launch like Purva Codename Hennur on Hennur Road, is bought off the plan, paid for in stages, and delivered on a future date, which changes both the cost and the risk.

For a buyer, this difference runs deeper than convenience. It changes the tax you pay, the certainty you get, and the way your money is committed. Rather than treating one as simply better, it helps to see them as two different bargains, each with a clear gain and a clear cost, which the sections below set out.

How does GST differ between the two?

GST applies to an under construction flat but not to a ready to move flat that already has its occupancy certificate. An under construction home attracts GST at 5 percent for a standard residential unit, or 1 percent for an affordable home, with no input tax credit. A completed flat is exempt once the occupancy or completion certificate has been issued, because at that point the sale is treated as a transfer of finished property rather than a construction service. Our guide to GST on under construction property sets out the detail.

The nuance to watch is that the certificate, not the physical state, decides GST. A flat that looks finished but does not yet have its occupancy certificate can still attract GST, so do not assume a ready looking unit is automatically tax free. Confirm the occupancy certificate before you conclude that no GST applies, because that document is what draws the line.

There is also a detail in how the GST is computed. As a guide to property GST explains, roughly one third of the agreement value is treated as the deemed land cost and left out of GST, so the tax effectively applies to about two thirds of the price. That softens the headline rate a little, but on a large purchase the GST on an under construction flat is still a meaningful sum to budget for.

Which is cheaper once GST is included?

Under construction usually has a lower base price, but the gap narrows once you add GST and the cost of waiting. An under construction flat can be priced around 10 to 20 percent below a comparable ready to move one, which is a real saving. But once you add the GST an under construction home attracts, and the rent you keep paying while you wait for possession, the effective difference shrinks. The table below sets out the main factors side by side.

So the honest comparison is on total cost, not base price. Work out the under construction figure including GST and the months of rent you will pay before possession, and set that against the ready to move price. Sometimes the under construction option is still clearly cheaper; sometimes the saving is thinner than it first appears.

A rough worked example makes the point. Suppose an under construction flat is priced at 80 lakh against a ready to move flat at 92 lakh, a base gap of 12 lakh. Add 5 percent GST to the under construction price and that is another 4 lakh, and a year or two of rent while you wait can add a few lakh more. The 12 lakh gap can shrink to a handful of lakh once these are counted, which is why the total cost comparison, and not the base price, is the one that should drive the decision.

What are the risks of under construction, and how does RERA protect me?

The main risk of under construction is delay, and RERA reduces it without removing it. A home bought off the plan can take a year or several to be delivered, and delays still happen because of funding gaps, labour shortages or pending approvals. RERA has made builders more accountable: at least 70 percent of buyer payments must be kept in a separate escrow account and used only for construction and land, and if the builder misses the registered completion date, the buyer is entitled to interest or compensation.

These protections are the reason an under construction purchase is safer than it once was, but they are safeguards, not guarantees of timely delivery. Our guide to the RERA 70 percent escrow account explains how buyer money is ring fenced, and reading it helps you judge how well protected your payments are in a project you are considering.

What do I gain and give up with ready to move?

With ready to move you gain certainty and lose some choice and a lower price. You can inspect the exact flat, confirm its quality, take possession at once, and avoid GST, which together remove most of the uncertainty a purchase carries. What you give up is the lower base price of an under construction home, the ability to book early in a project, and often some scope to customise, since the flat is already built. For a buyer who needs a home now and values certainty over saving, this is usually the more comfortable bargain.

It is also worth remembering that a ready to move flat still needs the same legal checks as any other. Immediate possession does not remove the need to verify the occupancy certificate, the title and the approvals, so treat the certainty of a finished flat as a head start on diligence, not a substitute for it.

Which should a buyer choose?

Choose based on your need for certainty against your sensitivity to price, after comparing total costs. There is no single right answer, only the answer that fits your timeline, your budget and your appetite for the wait and risk of an under construction home. The checklist below turns the decision into a set of concrete comparisons.

1. Confirm whether the flat has an occupancy certificate, since it decides GST.
2. Compare the total cost including GST, not just the base price.
3. For under construction, check the RERA registration and the declared completion date.
4. Confirm buyer payments go to the RERA escrow for an under construction project.
5. For ready to move, inspect the actual flat and verify the occupancy certificate.
6. Factor in the rent you keep paying while an under construction home is built.
7. Match the choice to your need for certainty against a lower price.

Working through these seven steps means you choose between the two with your eyes open, on the full cost and the real risk, rather than on the headline price that first drew you to one or the other. Either choice can be the right one for a buyer; the mistake is deciding on the base price alone.

Frequently asked questions

Is GST charged on a ready to move flat?

Not if the flat already has its occupancy or completion certificate, in which case the sale is GST exempt. An under construction flat attracts GST at 5 percent, or 1 percent for affordable housing. The certificate, not the physical state, decides this, so a finished looking flat without an occupancy certificate can still attract GST.

Is under construction always cheaper than ready to move?

Its base price is usually lower, often by around 10 to 20 percent, but the gap narrows once you add the GST an under construction flat attracts and the rent you keep paying while you wait. Compare the total cost, including GST and the months to possession, rather than just the headline base price of each option.

How does RERA protect an under construction buyer?

RERA requires at least 70 percent of buyer payments to be held in a separate escrow account used only for construction and land, and it entitles buyers to interest or compensation if the builder misses the registered completion date. These are real safeguards that reduce the risk of an under construction purchase, though they do not guarantee on time delivery.

What is the biggest risk of buying under construction?

Delay in possession is the biggest risk. A home bought off the plan can take a year or several to be delivered, and delays still occur due to funding gaps, labour shortages or pending approvals. RERA improves accountability and gives you a remedy for delay, but you should still check the builder's record and the declared completion date before committing.

Last updated 2026-07-12. PropNewz Team.