GST on an under-construction residential property runs at an effective 1% for affordable housing and 5% for everything else, both without Input Tax Credit for the buyer, under the scheme the GST Council put into effect from 1 April 2019. Affordable housing needs BOTH a carpet area cap — 60 sq m in a metro city or 90 sq m elsewhere — AND a value cap of ₹45 lakh to qualify. And once the entire consideration is received only after a completion certificate or first occupation, whichever comes first, the transaction falls outside GST entirely — a ready-to-move flat bought this way owes none.
How the 1% and 5% figures are actually built
The rate you see quoted everywhere as "1% GST" is not itself a tax rate written into any notification — it is the outcome of two things combined. Notification No. 11/2017-Central Tax (Rate), as amended to 1 April 2019, sets the construction of an affordable residential apartment at 0.75% central tax — 1.5% once the matching State GST is added — paid in cash only, with no ITC use allowed. Separately, GST law treats one-third of the total agreement value as the deemed value of the underlying land, which is excluded from the taxable base for a works contract of this kind. Run the 1.5% combined rate against the remaining two-thirds of the value and the arithmetic lands on an effective 1% of the FULL agreement value — which is why every consumer-facing summary, including this calculator, states it as a flat 1% rather than walking through the abatement each time.
The same mechanism scales up for non-affordable residential construction: CBIC's own account of the 33rd GST Council meeting states the effective rate on residential property outside the affordable segment at 5%, also without ITC, operative from the same 1 April 2019 date.
The affordable-housing test needs both conditions, not either one
CBIC's own definition sets affordable housing as a residential unit with a carpet area of up to 90 square metres in a non-metropolitan city or town, or up to 60 square metres in a metropolitan city, AND a value not exceeding ₹45,00,000 — both conditions have to hold at once. A 55 sq m flat priced at ₹52,00,000 in a metro fails the value test even though it clears the area test; a 40 sq m flat at ₹40,00,000 in a small town clears both and qualifies. The metro list for this purpose is fixed and specific: Bengaluru, Chennai, the Delhi NCR group (Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon and Faridabad), Hyderabad, Kolkata, and the whole Mumbai Metropolitan Region — a city outside that list runs the more generous 90 sq m area cap even if it is a large city in its own right.
Getting the carpet-area threshold backwards — treating the metro figure as 90 sq m and the non-metro figure as 60 sq m, the reverse of the actual rule — misclassifies exactly the transactions the affordable-housing scheme exists to catch: a genuinely affordable non-metro flat gets pushed into the 5% bracket, and a metro flat too large to qualify gets waved through at 1%. Check both figures against the definition above before relying on any summary that states them the other way round.
What "no ITC" means for what you're quoted
The concessional 1%/5% rates apply only where the promoter pays the tax in cash and does not set input tax credit against it — the builder cannot net the GST it paid on cement, steel and other inputs against the GST it collects from you, the way a business normally would under GST. That restriction is baked into the price you're quoted rather than shown as a separate deduction: a builder who used to net input credits against the pre-2019 12%/8% rates lost that ability under the current no-ITC regime, and the 1%/5% figures already reflect the industry having priced construction inputs into the base cost instead. There is nothing for a buyer to separately claim or reclaim here — the ITC restriction runs entirely on the builder's side of the transaction.
The exact trigger that takes a sale outside GST altogether
Schedule III of the CGST Act, 2017 lists the sale of a building as neither a supply of goods nor a supply of services — outside GST's scope entirely — but only "subject to clause (b) of paragraph 5 of Schedule II." That clause states the actual trigger: construction of a complex or building intended for sale is treated as a taxable supply of services EXCEPT where the entire consideration has been received only after issuance of a completion certificate by the competent authority, or after first occupation, whichever is earlier. Miss that condition — pay even a rupee of the price before the completion certificate exists — and the sale is a taxable, GST-liable construction service for its full value, not just for the pre-completion instalments.
"Competent authority" is not necessarily a government office. The same Schedule II clause defines it as the government or an authority empowered to issue a completion certificate, OR — where no such certificate is required from a government body — an architect registered with the Council of Architecture, a chartered or licensed engineer, or a licensed municipal surveyor. A buyer relying on "the building has a completion certificate" as their GST-free trigger should confirm which of these actually issued it and that the entire price was paid only afterward — a builder who collected even the booking amount before that date has already brought the transaction inside GST's scope for the whole sale.
GST tracks the payment schedule, and so does the earliest legal cap on that schedule
GST on an under-construction purchase is charged proportionally as each instalment falls due, not as one lump sum at booking or at possession — which means the schedule of payments you agree to is also the schedule on which GST gets billed. That schedule itself has an early legal ceiling: Section 13(1) of the RERA Act, 2016 bars a promoter from collecting more than 10% of the unit's cost as an advance or application fee before a registered, written agreement for sale exists. A demand for 20% or 30% up front, GST included, before any agreement has been registered is not just an aggressive payment schedule — it exceeds what the promoter is legally entitled to collect at that stage, GST or no GST.
A project's size doesn't change any of this. The same Act exempts a project from RERA registration altogether where the land involved does not exceed 500 square metres or the number of apartments does not exceed eight across all phases — a small enough development that neither RERA's registration requirement nor its 10%-before-agreement cap applies. GST liability is untouched by that exemption either way: a small, RERA-exempt project selling under-construction units still owes the same 1%/5% GST an equivalent large, RERA-registered project would, since GST is a central tax keyed to the nature of the supply, not to a state real-estate regulator's registration threshold.
Methodology
Rate and abatement figures are read from the GST Council's own hosted copy of the rate notification and CBIC's own update, not a secondary summary. The completion-certificate exemption is read from both halves of the CGST Act's own text — Schedule III and the Schedule II clause it cross-refers to — rather than from either alone. The RERA payment-cap and project-exemption facts are read from the central Act, which applies nationwide.
Sources
- CBIC — GST, An Update (1 May 2019) — accessed 2026-09-21
- GST Council Secretariat — Notification No. 11/2017-Central Tax (Rate), as amended to 1 April 2019 — accessed 2026-09-21
- CBIC — Central Goods and Services Tax Act, 2017, Schedule III — accessed 2026-09-21
- CBIC — Central Goods and Services Tax Act, 2017, Schedule II — accessed 2026-09-21
- UP-RERA — The Real Estate (Regulation and Development) Act, 2016 (full text) — accessed 2026-09-21