The Goods and Services Tax (GST) on real estate is one of the most confusing aspects of property buying in India. Since its introduction, the rates and rules have been revised multiple times. Here's the current position that every buyer and seller should understand.
For under-construction properties: Affordable housing (up to ₹45 lakhs, carpet area up to 60 sqm in metros / 90 sqm in non-metros) attracts 1% GST without Input Tax Credit (ITC). Other under-construction properties attract 5% GST without ITC. These rates apply on the total agreement value minus one-third (considered as land component).
Ready-to-move-in properties with Completion Certificate (CC) or Occupation Certificate (OC) are exempt from GST. This is a significant advantage for buyers looking at completed projects. However, the property's price may already factor in the builder's tax costs.
For sellers of residential properties, GST does not apply on resale transactions between individuals. Commercial property rentals above ₹20 lakhs annually attract 18% GST. Joint development agreements have specific provisions where the builder pays GST on the portion retained. Always consult a tax professional for your specific situation, and use Realty Pandit's resources for up-to-date information.