GST on real estate in India has evolved significantly since the original implementation in 2017. The April 2019 GST Council recommendations introduced new rates for residential properties with conditions on ITC, making the landscape more complex. This guide covers current GST rates and rules for buyers, sellers and developers in India in 2025.
GST on Purchase of Under-Construction Flats
Affordable Housing (New Rate — no ITC): 1% GST (0.5% CGST + 0.5% SGST) applies to affordable housing projects where the carpet area of the flat does not exceed 60 sq. metres in metropolitan cities (or 90 sq. metres in other cities) and the value does not exceed ₹45 lakh.
Other Residential Properties (New Rate — no ITC): 5% GST (2.5% CGST + 2.5% SGST) applies to all other under-construction residential properties (excluding affordable housing). Developers who chose this rate cannot claim ITC on inputs.
Old Rate (With ITC — for projects that opted for old scheme): 12% with ITC for non-affordable, 8% with ITC for affordable housing. Some ongoing projects may still be under the old rate regime.
GST on Completed/Ready-to-Move Properties
There is no GST on the purchase of a ready-to-move flat (where a Completion Certificate has been obtained). The sale of a completed property is treated as a sale of immovable property and is not subject to GST. Stamp duty and registration charges apply instead.
GST on Land
There is no GST on the sale of land. Land is not treated as goods or services under GST. However, development rights and long-term leases of land (of 30 years or more) can attract GST in specific circumstances.
GST on Commercial Properties
GST at 18% applies on rental income from commercial properties (if the landlord is GST-registered and turnover exceeds ₹20 lakh). From 2022, RCM applies for renting of residential property for commercial purposes by a registered person.
There is no GST on rental income from residential property used for residential purposes.
GST on Joint Development Agreements (JDA)
In a Joint Development Agreement, the landowner transfers development rights to the developer in exchange for constructed apartments. GST applies on the supply of construction services to the landowner. The landowner pays GST under reverse charge on the development rights transferred. This is a complex area requiring professional advice.
GST on Transfer/Resale of Property
GST does not apply on the resale/transfer of completed properties (where OC/CC has been issued). Only stamp duty and registration charges apply on property transfers.
Conclusion
GST on real estate has many nuances — the applicable rate depends on the property type, location, project registration and completion status. SPOTON provides expert GST advisory for real estate buyers, sellers and developers in Kerala. Contact us for a free consultation.
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