GST on property purchase: when you pay it and when you do not
Last updated 2 November 2026
GST on a residential flat is generally 5% while it is under construction, or 1% if it qualifies as affordable housing, with no input tax credit for the buyer. A completed flat sold after its completion or occupancy certificate carries no GST. The stage of the building on the sale date decides the tax, so confirm the current rates before you book.
Which rate applies to your flat?
The answer comes down to the stage of construction and the unit’s size and price.
| Your purchase | GST (confirm current rate) |
|---|---|
| Under-construction flat, standard | 5%, without input tax credit |
| Under-construction flat, qualifying as affordable | 1%, without input tax credit |
| Sale after the completion or occupancy certificate | No GST |
| Resale of a completed flat | No GST |
Does a Lucknow flat qualify as affordable housing?
A flat in Lucknow qualifies only if its carpet area is up to 90 sq m and its price is up to ₹45 Lakh. Both conditions must be met. The definition sets a smaller limit of 60 sq m for metropolitan cities, which it lists as Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon and Faridabad), Hyderabad, Kolkata and Mumbai with the whole of its metropolitan region. Lucknow is not on that list, so the 90 sq m limit applies. A flat at ₹46 Lakh does not qualify, however small it is.
How much does GST add in rupees?
On a standard under-construction flat, GST adds about ₹5,000 for every ₹1 Lakh of the taxable price. As a hypothetical example, a ₹60 Lakh under-construction flat carries ₹3 Lakh of GST at 5%. A hypothetical ₹40 Lakh flat that meets the affordable test carries ₹40,000 at 1%. Neither figure describes a real unit. For most buyers GST is a straight cost, because no input credit comes back. It is also separate from stamp duty and registration, so one does not replace the other. Add both to your budget.
Check which lines carry GST too. Preferential location charges paid with the flat’s price before the completion certificate get the same treatment as the construction service, following a GST Council recommendation in 2024. Maintenance charges follow separate rules.
Is GST paid all at once?
No. On an instalment plan, GST is normally billed with each demand, so it arrives in stages through the build. Ask for the tax to be shown as a separate line on every demand letter. Your payment receipts should show both figures, and you should keep them together.
Does skipping GST make ready-to-move cheaper?
Not automatically. Ready-to-move avoids GST and construction delay, but it may be priced higher because the risk has gone. The honest comparison is total cost against total cost. Add GST to the under-construction option, add any rent you pay while waiting, and set that beside the ready flat’s full price. Our page on resale and ready flats covers the other side of the sum.
This matters most in the middle of the market, where a 5% tax is a large number. If you are weighing options, compare a live project at its full cost with a finished unit. Then check the stage yourself: any new listing, such as Eldeco Skywalk, should be judged on the status shown on the UP RERA record on the day you book, not on what a brochure says. Use the difference between completion and occupancy certificates to work out which stage a building has really reached.
Frequently asked questions
Can a buyer claim input tax credit on a flat?
A buyer of a residential flat under these rates gets no input tax credit, so the GST paid stays as a cost. A CA can confirm the position for a business purchase.
Is GST charged if I book before the certificate but register after it?
Timing can change the answer. Ask the developer for a written note on how your payments before and after the certificate are treated, and confirm it with a CA.