GST on Real Estate: What Property Buyers & Sellers Must Know

GST on Real Estate in India Explained: Current GST rates, rules, and exemptions for property buyers and sellers of homes, land, and under-construction property
In India, the Goods and Services Tax (GST) on the real estate sector directly determines the amount paid or received at the end of a property transaction, particularly for homes and commercial properties under construction. Having good knowledge of the present-day real estate GST, the exemptions, and the application on land and other charges enables both the parties, the property buyer and the seller, to plan the costs, the prices, and the cash flows more efficiently.​
GST on Real Estate:
The imposition of GST on Real Estate is primarily on the ‘supply’ of construction services, which is why it is charged on under-construction buildings and some development rights, but not on finished constructions, provided they have a completion or occupancy certificate. The majority of homebuyers, therefore, will have to pay GST when they book a flat or a villa that is still under construction. Still, ready-to-move-in homes with a completion certificate are, at present, outside the GST range, although stamp duty and registration still apply.​
As far as the real estate industry is concerned, the impact of GST was such that a lot of taxes like VAT, service tax, and state levies that existed earlier were eradicated, forming a more uniform tax treatment throughout the projects in India. The builders now get GST from the real estate sector transactions and pay it to the government while considering input tax credits (ITC) wherever permitted under the prevailing scheme.​
Current GST rate on real estate (2025)
The Goods and Services Tax (GST) effective rate for real estate projects under construction in the residential sector as of 2025 will be 5% for normal housing and 1% for affordable housing, both generally without the benefit of input tax credit.