GST on under-construction apartments is 5% of the agreement value for most homes in 2026. Affordable homes pay just 1%, if they meet a size limit and a price cap of ₹45 lakh. Ready homes with an Occupancy Certificate attract no GST at all. At the 5% rate, the builder cannot pass on input tax credit to you. The GST reforms of September 2025 cut rates on cement and building materials, but left home rates unchanged.
| Type of Home | GST Rate | Input Tax Credit |
| Under-construction, non-affordable | 5% | Not available |
| Under-construction, affordable | 1% | Not available |
| Ready home with Occupancy Certificate | Nil | Not applicable |
| Resale home | Nil | Not applicable |
A home must meet both conditions below to qualify for 1% GST.
| Condition | Metro Cities | Non-Metro Cities |
| Carpet Area | Up to 60 sq m (about 646 sq ft) | Up to 90 sq m (about 969 sq ft) |
| Agreement Value | Up to ₹45 lakh | Up to ₹45 lakh |
Mumbai counts as a metro city under these rules. So most homes in premium Mumbai suburbs fall under the 5% rate.
GST applies to services, and building your home counts as a service while work goes on. Once the Occupancy Certificate comes through, the home becomes a finished property. At that point, a sale is a transfer of property, which falls under stamp duty and not GST.
This is why ready homes often cost more upfront per sq ft. You save the GST, but builders often price that saving into the rate.
GST applies to more than just the base price, as the quick guide below shows.
| Charge | GST Applies? |
| Base price of the flat | Yes, at 5% or 1% |
| Car parking, when part of the agreement | Yes, at the same rate |
| Floor rise and view premium | Yes, at the same rate |
| Clubhouse membership in the agreement | Yes, at the same rate |
| Stamp duty and registration | No |
| Society maintenance up to ₹7,500 a month per member | Exempt in most cases |
For maintenance above ₹7,500 a month, GST at 18% can apply on the full amount. This happens when the society's yearly turnover also crosses ₹20 lakh.
These examples use price points from Prestige Grove Park, an under-construction project in Borivali.
| Home | Agreement Value | GST at 5% |
| 2 BHK, 750 sq ft | ₹2.55 Cr | ₹12.75 lakh |
| 2 BHK, 950 sq ft | ₹3.23 Cr | ₹16.15 lakh |
| 3 BHK, 1,100 sq ft | ₹3.74 Cr | ₹18.70 lakh |
| 3 BHK, 1,350 sq ft | ₹4.59 Cr | ₹22.95 lakh |
You do not pay all the GST at once, as the builder adds it to each instalment. So when you pay a 10% stage, you also pay 5% GST on that amount.
Here is how it looks for a ₹2.55 Cr home with a 10-stage plan.
| Instalment | Amount | GST at 5% | Total Payable |
| Each 10% stage | ₹25.5 lakh | ₹1.275 lakh | ₹26.775 lakh |
This keeps your GST outflow spread over the full build period, in line with your payments.
The GST reforms that came into force on 22 September 2025 cut tax on many building materials. Cement dropped from 28% to 18%, and items like bricks, tiles and sand moved to 5%. These cuts lower the builder's costs, though the 5% GST on homes stayed the same.
Some builders may pass part of this saving to buyers through lower rates or offers. Ask the sales team whether the project's pricing reflects these lower costs.
Both options have trade-offs, and the GST is only one part of the choice.
For a long-term buyer, an under-construction home in a growing area can still offer better value. Just factor in the GST and the rent you may pay while you wait.
GST on under-construction flats is 5% of the agreement value for non-affordable homes, while affordable homes pay 1%. Builders cannot pass on input tax credit to you at either rate.
No, ready homes with an Occupancy Certificate carry no GST, and neither do resale flats. The sale counts as a transfer of property, not a service.
A ₹2.55 Cr under-construction flat in Mumbai attracts 5% GST, or ₹12.75 lakh. You pay it along with each instalment to the builder. Stamp duty and registration are separate from this amount.
Yes, parking that forms part of your sale agreement attracts GST at the flat's rate. The same applies to floor rise, view premium and club charges. Stamp duty and registration do not attract GST.
No, GST 2.0 did not change the 5% or 1% rate on homes. It cut GST on cement, bricks, tiles and sand, which lowers building costs. Builders may pass part of this saving to buyers.
Maintenance up to ₹7,500 a month per member stays exempt from GST in most cases. Above that, 18% GST can apply on the full amount. This applies only when the society's yearly turnover crosses ₹20 lakh.
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