GST on Under-Construction Property in India (2026)
Buying under construction? Affordable homes are 1% GST and other homes 5% (both without ITC); commercial under-construction: confirm the current rate with your CA; a ready-to-move property with a completion certificate carries no GST. Here's the full 2026 guide.
Part of: The Complete GST Guide for Small Business in India (2026)
Property GST hinges on one thing: whether construction is complete. An under-construction home carries GST; a ready-to-move flat with a completion certificate does not. And within under-construction, affordable and other homes have different rates. Here's the 2026 picture for buyers and builders.
Quick answer: affordable under-construction home = 1% (no ITC); other under-construction home = 5% (no ITC); commercial under-construction = confirm the current rate with your CA (with ITC); ready-to-move (completion certificate) = no GST.
Property GST at a glance
| Property | GST | ITC |
|---|---|---|
| Affordable under-construction home | 1% | No |
| Other (non-affordable) under-construction home | 5% | No |
| Commercial under-construction (shop/office) | Confirm current rate with your CA | Yes |
| Ready-to-move with completion certificate | Nil (no GST) | — |
| Resale / secondary property | Nil (no GST) | — |
Why ready-to-move is GST-free
GST is a tax on the supply of under-construction services. Once a project has its completion certificate (or first occupation), a sale is treated as a transfer of immovable property, which is outside GST — only stamp duty and registration apply. That's why a ready-to-move flat has no GST while an under-construction one does.
The no-ITC trade-off on homes
The 1% and 5% residential rates come without input tax credit for the builder — a lower headline rate in exchange for no credit on cement, steel and inputs. Commercial under-construction allows ITC; confirm its current rate with your CA. The developer's inability to claim ITC on 1%/5% homes is part of why those rates are low.
General information only, not tax advice; definitions (affordable housing limits) and rates can change. Confirm your specific purchase on CBIC/RERA notifications or with your CA. Last reviewed: September 2026.
Builders: manage GST with KukBook
KukBook handles project-wise billing, the residential and commercial under-construction treatment, customer/unit ledgers and GST returns — built for developers and contractors.
