FAQ: Is GST Applicable on Ready-to-Move Property?

The GST rules for real estate depend on the completion status of the property at the time of sale.

Ready-to-move property: If a property has received its Completion Certificate (CC) and is being sold after completion, no GST is applicable. The transaction is treated as a sale of immovable property, which is exempt from GST. This is one reason ready-to-move properties are attractive to buyers who want to avoid the GST cost.

Under-construction property: GST is applicable on the sale of under-construction property. The rates are:

- Affordable housing (carpet area up to 60 sq m in metros, up to 90 sq m in non-metros, priced up to ₹45 lakh): 1% GST without input tax credit (ITC). - All other residential under-construction property: 5% GST without ITC.

Commercial under-construction property: 12% GST (with ITC available on construction services).

Important nuances:

- The GST is calculated on the agreement value, not including stamp duty and registration charges.

- If you buy a ready-to-move property from a builder who has the CC but hasn't sold all units, the unsold units may still attract GST if sold before a certain period — the rules here are nuanced and depend on the timing of the CC and the sale.

- Resale of a ready-to-move property between two individuals (not involving the builder) does not attract GST.

For investors, the GST on under-construction property (5%) is typically more than offset by the pre-launch/under-construction pricing discount and the appreciation during the construction period. The key is to factor the GST into your total cost calculation when comparing under-construction vs ready-to-move options.

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