Buying a new home in India involves many costs—land, construction, stamp duty… and GST. Understanding GST on property India and how state-wise GST rates vary can save you confusion—and money. In this detailed guide, we’ll walk through current GST rates, how they apply across states, and what buyers should keep in mind to make an informed home purchase.
Basics of GST on Property India
- GST is only for under-construction properties, not ready-to-move flats or resale homes.
- Rates are:
- 1% GST (without ITC) for affordable housing, defined as homes under ₹45 lakh and up to 60 m² carpet area in metros or 90 m² elsewhere.
- 5% GST (without ITC) for non-affordable residential projects .
- 1% GST (without ITC) for affordable housing, defined as homes under ₹45 lakh and up to 60 m² carpet area in metros or 90 m² elsewhere.
- Commercial properties attract 12% GST, with ITC available.
- No GST on ready-to-move-in or resale properties—regardless of state.
Why India-wide Rates Still Feel Different per State
Though GST is uniform across India, overall cost differs by state due to:
- Stamp Duty & Registration Fee (not under GST): Varies between 5–10% stamp duty + ~1% registration. For example, Maharashtra charges ~5%, Telangana around 7–8%.
- Local Taxes: Cess, amenities charges, and municipal levies differ among states.
- Affordable vs Non-affordable Definitions: E.g., affordable limits differ in metros vs smaller cities—affects GST classification.
State-Wise GST & Tax Implications
Delhi & NCR
- 1% GST on affordable, 5% on others. Stamp duty ~6%–7%; registration ~1%.
- In Gurgaon, additional infrastructure charges apply.
Mumbai & Maharashtra
- Same GST slabs. Stamp duty: 5%, registration: ~1%.
- Example: ₹50 lakh home attracts ₹2.5 lakh GST (5%), ₹2.5 lakh stamp duty, and ₹50,000 registration → Total tax ≈ ₹5 lakh.
Bengaluru & Karnataka
- 1%/5% GST bands apply. Stamp duty: 5.6%, registration: 1%.
- Affordable housing GST relief appeals to homebuyers near 1BHK price points.
Hyderabad & Telangana
- Stamp duty ~7%, registration ~1%.
- New homes near ₹45 lakh carpet value qualify for 1% slab, though overall tax still higher than stamp duty only.
Chennai & Tamil Nadu
- Stamp duty ~7%, registration ~1%.
- GST paid only on under-construction homes; ready units just attract the above duties.
State-Wise Example Comparison
| City | Carpet Area | Sale Price | GST Rate | GST Amount | Stamp Duty | Reg Fee | Total Tax Impact |
| Delhi | 65 m² | ₹50 lakh | 5% | ₹2.5 lakh | ₹3.25 lakh | ₹50K | ₹6.25 lakh |
| Pune | 55 m² | ₹40 lakh | 1% | ₹40K | ₹2 lakh | ₹40K | ₹2.48 lakh |
| Hyderabad | 80 m² | ₹60 lakh | 5% | ₹3 lakh | ₹4.2 lakh | ₹60K | ₹7.8 lakh |
(This example assumes carpet area lunch ₹45 lakhs threshold and taxes including stamp duty at regional rates.)
How GST Affects Your Home Buying Decision
- Under-Construction vs Ready-to-Move: Skip GST but pay higher upfront stamp duty for completed homes.
- Carpet Area Planning: Keeping your home under thresholds maximises GST savings.
- Affordable Housing Focus: The 1% GST window is attractive in metros if you’re near ₹45 lakh offer.
- Don’t Forget Local Duties: High stamp duty states (e.g. Tamil Nadu, Telangana) will tip total costs.
Real-Life Snap-shot: Case of a Pune Buyer
Ankit in Pune wanted a ₹45 lakh apartment (65 m² sale price translates to ~55 m² carpet):
- GST: 1% = ₹45,000
- Stamp duty: ~5% of ₹45 lakh = ₹2.25 lakh
- Registration: 1% = ₹45,000
Total upfront taxes: ₹3.15 lakh.
Had he bought a ₹60 lakh flat in the ₹60 lakh range, GST jumps to 5% (₹3 lakh), raising total tax burden to over ₹6 lakh.
GST on Maintenance & Amenities
- Maintenance fees over ₹7,500/month attract 18% GST on entire sum.
- Amenities like gyms, clubhouse and parking bundles may include GST—ask for break-up and inclusion in agreement.
Tips when Buying Across States
- Always ask for “GST inclusive” pricing so you’re comparing on equal footing.
- Get a tax document detailing GST, stamp duty, reg charges separately.
- If home is borderline affordable, buy while carpet or price keeps you within 1% band.
- Consider state duties: 6% Delhi vs 7% Telangana can be ₹1 lakh difference on ₹50 lakh.
- Consult a local CA or tax advisor when buying high-value flats to optimise tax planning.
Frequently Asked Questions
- Does GST apply to resale flats?
No—Resale and ready homes are exempt. - Is stamp duty under GST?
No—stamp duty and registration fees are separate, state-imposed taxes . - What about commercial properties?
GST at 12% applies during construction; post-handover commercial rent/lease attracts GST.
Conclusion
Understanding GST on property India and how state-wise GST rates stack up is crucial for budgeting and negotiation during a home purchase. While uniform GST rates bring clarity, variations in stamp duty and local charges mean your total tax varies by city—sometimes significantly. By smartly selecting carpet area, home values, and purchase timing, you can keep your tax outgo lean and precise.
Source : fulinspace.com
