GST on under construction flats is 5% of the total price for most homes, as of September 2026. Affordable homes pay 1%. Neither rate lets the builder claim input tax credit. A home bought after its completion certificate pays no GST at all. Add-ons such as club membership often carry 18%. On a ₹1 crore home, as an example, the base GST works out to ₹5 lakh.
GST rates on under construction flats in 2026
The GST Council set the current rates for homes from 1 April 2019. Before that, buyers paid 12% with input tax credit. The Council cut it to 5% and 1% and removed the credit. Lender guides and builder blogs confirm the rates have not changed since, including after the September 2025 GST rate reform.
| Type of home | GST rate | Input tax credit | Condition |
|---|---|---|---|
| Non-affordable, under construction | 5% of total price | Not allowed | Most 2 and 3 BHK homes in Bengaluru |
| Affordable, under construction | 1% of total price | Not allowed | Carpet up to 60 sq m in a metro and price up to ₹45 lakh |
| Ready to move, full price paid after the completion certificate | Nil | Not relevant | No money paid before the certificate |
| Resale flat bought from an owner | Nil | Not relevant | Sale of a finished home by an owner |
Why no GST on finished homes? The law treats the sale of a completed building as a sale of property, not a supply of services. So once the builder gets the completion or occupancy certificate, later payments fall outside GST. But money you paid before that date keeps the GST charged on it.
How the one-third land deduction works
Land is not a supply under GST, so the tax should fall only on construction. To keep it simple, the law assumes that one-third of the total price is land. Tax applies to the other two-thirds.
Here is a point many online guides get wrong. The 5% is not charged on two-thirds of the price. The notification sets a 7.5% rate on the two-thirds, which equals 5% of the full price. For affordable homes, 1.5% on two-thirds equals 1% of the full price.
So the 5% you see on a cost sheet already includes the land deduction. You should not take off one-third again. If a cost sheet shows GST as 5% of only two-thirds of the price, ask the builder why. Tax guides such as ClearTax and TaxGuru set out the rule this way.
Who qualifies for 1% GST in Bengaluru
The 1% rate is only for affordable homes. You must pass both tests below.
- Carpet area. Up to 60 sq m (about 646 sq ft) in a metro city. The GST definition lists Bengaluru as a metro.
- Price. Up to ₹45 lakh in total.
Many buyers think any home under ₹45 lakh qualifies. That is not true in Bengaluru. A 70 sq m flat priced at ₹44 lakh still pays 5%, because its carpet area is above 60 sq m.
Most 2.5 BHK and 3 BHK homes along Sarjapur Road have carpet areas well above 60 sq m. For example, the 2.5 BHK plans in the builder’s brochure show carpet areas of 939 to 970 sq ft. Homes of that size pay the 5% rate. You can compare carpet areas on the floor plans.
GST on parking, club membership and maintenance
The base rate covers the home itself. Other lines on a cost sheet can carry different rates. This is where the final GST bill often grows.
| Charge on the cost sheet | Usual GST treatment | Why |
|---|---|---|
| Car park sold with the flat in one price | Often follows the flat’s 5% | Treated as part of one bundled supply |
| Car park sold on its own | Can be 18% | Some advance rulings, such as a 2023 West Bengal ruling, held this |
| Club membership | Often 18% | Billed as a separate service |
| Advance maintenance by the builder | Often 18% | A service billed by the builder, not the owners’ group |
| Legal and documentation fee | Often 18% | A service fee |
| Stamp duty and registration | No GST | These are state charges, not a supply |
Rulings on parking are not all the same. The treatment depends on how the builder writes the sale. Ask for a cost sheet that shows GST on each line before you book.
Maintenance after handover is a separate matter. Once the owners’ association takes over, a different test applies. GST of 18% is due only if a home’s monthly charge tops ₹7,500 and the association’s yearly turnover is ₹20 lakh or more. That is the CBIC position as of September 2026.
Worked example: GST on a hypothetical ₹1 crore flat
This example uses round, made-up numbers. It is not a quote for any project. Assume a non-affordable flat with a ₹1 crore base price, all paid before the completion certificate.
| Item | Calculation | GST |
|---|---|---|
| Base price, including land | 5% of ₹1 crore (7.5% on ₹66.67 lakh) | ₹5,00,000 |
| Club membership, ₹3 lakh | 18% of ₹3 lakh | ₹54,000 |
| Advance maintenance, ₹72,000 | 18% of ₹72,000 | ₹12,960 |
| Total GST | — | ₹5,66,960 |
The base GST is the big number, at ₹5 lakh. The add-ons add about ₹67,000 in this example. That is why the line-by-line cost sheet matters as much as the base price.
Stamp duty and registration come on top, and GST does not apply to them. Our stamp duty Bangalore 2026 guide works out those charges on the same ₹1 crore example.
When you pay GST in a construction-linked plan
In a construction-linked plan, you pay the price in stages as the building rises. GST is due on each payment when the builder raises the demand. So a 10% instalment of ₹10 lakh, as an example, carries ₹50,000 of GST at 5%.
A home loan often covers the base instalments. Your bank may or may not fund the GST part. Many buyers pay GST from their own savings, so plan for it in cash.
GST paid before the completion certificate stays. If the builder gets the certificate after 80% of your payments, only the last 20% escapes GST. That is why the RERA completion date matters to your cost. You can check it using our Karnataka RERA check steps, and track site progress under construction status.
Under construction vs ready to move: the GST trade-off
GST is one reason some buyers prefer a finished home. On a ₹1 crore flat, as an example, the 5% GST is ₹5 lakh. A ready-to-move flat at the same price, bought after the completion certificate, carries no GST. On paper, that is a saving of ₹5 lakh.
But the prices are rarely the same. In Bengaluru, a finished flat often costs more per sq ft than a similar flat at launch. Builders price the early stage lower because buyers wait 3 to 4 years and take on delay risk. So compare the full cost, not only the tax line.
| Factor | Under construction | Ready to move (after the certificate) |
|---|---|---|
| GST on base price | 5% (1% if affordable) | Nil |
| Price per sq ft | Often lower at launch | Often higher |
| Rent while you wait | You may pay rent for 3 to 4 years | You move in soon |
| Pre-EMI on a home loan | Interest on the part paid out | Full EMI from day one |
| Delay risk | Yes, covered by RERA remedies | None on handover |
| Choice of tower and floor | Wider | Limited to unsold units |
A quick way to compare is to add up four numbers for each option. Take the base price, the GST, the rent you pay while you wait and the interest on the loan before handover. The lower total is the cheaper home for you, not the one with less GST.
How to check GST invoices and what to ask
Each time you pay, the builder should give you a tax invoice. A proper GST invoice shows a few fixed details. Check them each time, since errors are easier to fix early.
- The builder’s GSTIN, the 15-character GST number for Karnataka.
- Your name and the unit number, matching the agreement.
- The taxable value and the rate, split into CGST and SGST.
- The total GST, which should equal 5% of the instalment for a non-affordable home.
Keep every invoice with its payment receipt. You will need them if you cancel, if you claim a refund or if a dispute reaches K-RERA. A chartered accountant can check a sample invoice for you in a few minutes.
If you cancel a booking, the refund of GST depends on timing. A builder can adjust the GST it paid on a cancelled sale within set time limits under the GST law. Ask for the refund terms in writing before you pay the booking amount.
Before you pay the booking amount, 5 questions to the builder can clear up most GST doubts. Ask for the answers in writing, or on the cost sheet itself.
- Is GST shown at 5% of the full price, or at some other base?
- Which lines carry 18%, and why?
- Is the car park part of the flat’s price or a separate sale?
- Will you charge GST on each instalment, and on which date?
- If I cancel, how and when will you refund the GST I paid?
For more guides on the costs of buying a home, visit the blog.
This article is general information as of September 2026, not tax advice. GST rules and rulings can change, so confirm your case with a chartered accountant.
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Frequently asked questions
As of September 2026, GST is 5% of the total price for most under construction flats, without input tax credit. Affordable homes pay 1%. The rates have stayed the same since April 2019.
No. GST law treats one-third of the total price as land. The 5% rate is really 7.5% on the other two-thirds, which works out to 5% of the full price.
No, if the full price is paid after the completion or occupancy certificate is issued. Any money you pay before that certificate still carries GST.
A home in a metro city such as Bengaluru qualifies only if its carpet area is up to 60 sq m and its price is up to ₹45 lakh. Both tests must be met.
Often yes, at 18%, when the builder bills them as separate services. Parking sold as part of the flat usually follows the flat's rate, but rulings differ, so check your cost sheet.
Published by IamHere Realty, authorised channel partner for Adarsh Welkin Park. Project details are from the developer’s official material; verify every detail with the sales team before you decide.