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1% affordable (≤₹45L + size limit), 5% other under-construction, ZERO ready possession. Commercial 12% effective with ITC. Builders lost ITC post-April 2019.
Rates updated — GST 2.0, effective 22 September 2025
The 56th GST Council abolished the 12% and 28% slabs with effect from 22 September 2025. India now runs a 5% merit rate, an 18% standard rate and a 40% de-merit rate for luxury and sin goods. If you have an older figure in mind, that is why the number on this page has changed. Property rates were NOT among them — 1%, 5% and zero-on-ready all stand. The commercial 12% also stands, because it was never a 12% slab: it is 18% charged on two-thirds of the price after the deemed one-third land deduction. What did move is builder input cost, with cement cut from 28% to 18%.
REAL ESTATE GST — these rates were NOT changed by the 22 September 2025 GST 2.0 reform: (1) AFFORDABLE HOUSING (carpet area ≤ 60 sqm metro / 90 sqm non-metro AND price ≤ ₹45L): 1% GST (no ITC). (2) OTHER UNDER-CONSTRUCTION: 5% GST (no ITC). (3) READY POSSESSION (Occupancy Certificate received): ZERO GST. (4) COMMERCIAL UNDER-CONSTRUCTION: 12% EFFECTIVE GST (with ITC). (5) RESALE properties: ZERO GST (capital gains applies). KEY DISTINCTION: under-construction = GST, ready = no GST.
IMPORTANT — WHY COMMERCIAL IS STILL 12% WHEN THE 12% SLAB WAS ABOLISHED: the commercial figure was never a 12% slab. The notified rate is 18%, charged after a deemed one-third deduction for the land value — 18% on two-thirds of the price works out to 12% of what you actually pay.
Abolishing the 12% slab did not touch it. Source: Notification 11/2017-Central Tax (Rate) serial 3 item (if) read with paragraph 2; unamended by Notification 15/2025.
BUYER GST TREATMENT: (1) UNDER-CONSTRUCTION purchase: pay GST on agreement value (separately from stamp duty). (2) Example ₹1cr flat (other category): 5% GST = ₹5L on top of property cost + 7% stamp duty Mumbai = total ₹1.12cr outlay. (3) READY POSSESSION: NO GST. Saves significantly. (4) AFFORDABLE: 1% GST = ₹50K on ₹50L flat. (5) NO INPUT TAX CREDIT for buyer — final cost.
STRATEGIC: ready possession lower total cost. Under-construction higher upfront.
POST-APRIL 2019 GST OVERHAUL: (1) Builders LOST INPUT TAX CREDIT (ITC) — major change. (2) Rates DROPPED: 1% affordable, 5% other (vs previous 8% + ITC). (3) NET IMPACT on buyer: similar or slightly lower. (4) BUILDERS pay GST on inputs (cement, steel, labor) but CAN'T claim ITC — so the 22 September 2025 cut in cement from 28% to 18% is a straight cost saving for residential developers, not a credit they were recovering anyway. (5) Cost passed to buyer in property price. (6) COMMERCIAL still has ITC — different treatment. (7) NEW PROJECTS post-April 2019 default to new scheme. ONGOING projects had choice to opt.
AFFORDABLE HOUSING for 1% GST: (1) CARPET AREA ≤ 60 sqm in metro cities (Mumbai, Delhi, Chennai, Kolkata, Bangalore, Hyderabad). (2) CARPET AREA ≤ 90 sqm in other cities/towns. (3) AGREEMENT VALUE ≤ ₹45L. (4) BOTH conditions must apply. EXAMPLE: 55 sqm carpet in Mumbai at ₹40L = affordable, 1% GST. 70 sqm carpet in Mumbai at ₹45L = NOT affordable (area exceeds), 5% GST.
STRATEGIC: affordable bracket buyers save 4% GST (₹2-3L on ₹50L property).
PROPERTY GST STRATEGY: (1) READY POSSESSION purchases: ZERO GST. Saves ₹5-10L on under-construction. (2) Wait for OCCUPANCY CERTIFICATE before purchase if possible. (3) AFFORDABLE bracket target: 1% vs 5% saves 4%. (4) COMMERCIAL property: 12% effective GST (18% on two-thirds after the land deduction) + ITC — works for business buyers. (5) REGISTERED BUYER (GST holder buying for business use): can claim ITC on commercial. (6) UNDER-CONSTRUCTION + PRE-COMPLETION resale: GST applies. (7) NRI BUYERS: same rates.
PAN + GST applicable. (8) CONSULT property + GST specialist CA for complex transactions.
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