GST applies when you buy a flat or villa that is still under construction: 1% of the price for affordable housing and 5% for other residential units, both without input tax credit to the builder. There is no GST on a ready-to-move home sold after the completion certificate is issued, on resale homes, or on the sale of plain land. These rates have applied to residential real estate since 1 April 2019 and were not changed by the GST rate rationalisation of September 2025.
Key takeaways
- Under-construction affordable housing: 1% GST; other residential units: 5% GST, without input tax credit.
- Affordable in Coimbatore means price up to ₹45 lakh and carpet area up to 90 sq m (60 sq m in the six metro cities).
- No GST on homes sold after the completion certificate, on resales, or on the sale of land itself.
- GST is charged on the price after a deemed one-third deduction for land, which is why the effective rates are 1% and 5%.
- Separate charges such as maintenance, club membership or car parking may attract GST at their own rates.
Why under-construction property attracts GST
Under GST law, the sale of land and of a completed building is not a supply of goods or services. When you buy a flat before completion, the builder is effectively providing a construction service, which is taxable. The completion certificate (or first occupation, whichever is earlier) is the dividing line. Our guide to the completion certificate explains why this document matters for more than tax.
Rates for residential property
| Type of purchase | GST | Input tax credit to builder |
|---|---|---|
| Affordable residential unit, under construction | 1% | No |
| Other residential unit, under construction | 5% | No |
| Commercial units within a residential project (limited share of carpet area) | 5% | No |
| Ready-to-move unit sold after completion certificate | Nil | Not applicable |
| Resale flat or house | Nil | Not applicable |
| Sale of land or plot | Nil | Not applicable |
Commercial property sold under construction outside residential projects follows separate rules and rates. Ask the builder and your tax adviser for the rate that applies to your specific unit.
What counts as affordable housing
A unit is affordable for the 1% rate if both conditions are met:
- the gross amount charged is up to ₹45 lakh, and
- the carpet area is up to 60 sq m in metropolitan cities (Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata and Mumbai region) or up to 90 sq m elsewhere.
Coimbatore is not one of the listed metro cities, so the 90 sq m (about 969 sq ft) carpet area limit applies. Many 2 BHK flats in areas such as Saravanampatti or Kovilpalayam can fall within it if the price is also within ₹45 lakh.
How the calculation works
The notified rates are 1.5% and 7.5% on the construction portion, with the value of land deemed to be one-third of the total amount. The effect is 1% and 5% on the full agreement value. You pay GST on each instalment as it is billed, not on amounts paid after the completion certificate.
Example
You book a flat for ₹60 lakh under construction and pay 70% before completion. GST at 5% applies on ₹42 lakh, which is ₹2.1 lakh. If the remaining 30% is paid after the completion certificate is issued, GST on that part is nil. Stamp duty is separate and is paid on registration.
Plots and villa plots
The outright sale of land is outside GST. However, where a developer charges separately for services such as developing roads, drainage or amenities in a layout, those charges may attract GST. Read the sale agreement carefully and ask for a break-up. See our comparison of villa plot vs ready villa for how tax and stamp duty differ between the two.
Other charges that attract GST
- Maintenance: charges collected by a residents’ association can attract 18% GST when they exceed ₹7,500 per month per member and the association’s turnover crosses the registration limit.
- Preferential location, club membership, car parking: check whether they are part of the composite price or billed separately.
- Construction of your own house: if you hire a contractor to build on your plot, their services and materials carry GST. The September 2025 changes cut GST on some building materials, which may lower costs. See house construction cost in Coimbatore.
Ready-to-move or under-construction?
GST is only one factor. An under-construction flat may be cheaper and allow staggered payments, but carries delivery risk and a GST cost. A completed home has no GST and no delay risk but may cost more. Compare total cost, RERA registration and builder track record. Our under-construction vs ready-to-move guide covers the trade-offs, and TNRERA’s portal shows project registration details.
Tips before you pay
- Get a written cost sheet showing price, GST, and every other charge separately.
- Check the builder’s GSTIN and that invoices show the correct rate.
- Ask when the completion certificate is expected; payments after it attract no GST.
- Do not agree to pay GST on the full price if part of it is for land sold separately without construction obligations.
Frequently asked questions
Is GST payable on a resale flat?
No. GST does not apply to the resale of a completed flat or house. You pay only stamp duty and registration fee.
Is there GST on buying a plot in Coimbatore?
The sale of land itself is not subject to GST. Separate development or amenity charges billed by a developer may be taxable.
What is the GST on a ₹40 lakh flat in Coimbatore?
If the carpet area is 90 sq m or less and it is under construction, the affordable rate of 1% applies. Otherwise 5% applies.
Did GST 2.0 in September 2025 change GST on flats?
The residential real estate rates of 1% and 5% were not changed by the September 2025 rate rationalisation.
This article is general information as of September 2026, not legal, tax or financial advice. Rules and rates change; confirm with a qualified advocate, chartered accountant or the relevant department before you act.
References
- NoBroker: GST on flat purchase
- Wikipedia: Goods and Services Tax (India), including the September 2025 rate changes
Comparing ready and under-construction homes?
We can give you a clear cost sheet, including GST, stamp duty and other charges, for Coimbatore projects you are considering.
