The GST Council’s recent rate cuts on cement and other construction materials have triggered fresh discussion in the real estate market. But for homebuyers, the bigger question remains: How much GST do you actually pay on a house?
GST on different types of housing
The tax rates on property transactions have not changed. What remains in force is a clear three-tier structure:
- Affordable Housing: 1% GST
Applies to homes priced up to ₹45 lakh, with a carpet area of 60 sq. m in metro cities (Mumbai, Delhi-NCR, Pune, Bengaluru, Chennai, Hyderabad, Kolkata) and 90 sq. m in non-metros. - Other Under-construction Homes (mid-income and luxury): 5% GST
Applies to all residential projects outside the affordable definition. Whether a flat costs ₹60 lakh or ₹6 crore, the rate remains 5%. - Completed, Ready-to-Move Homes: Exempt from GST
Once a project has received its Occupancy Certificate (OC), no GST can be levied. However, buyers still need to pay stamp duty and registration charges as per state laws.
Material relief, but will it reach buyers?
While property tax rates remain unchanged, the GST Council has slashed cement duty from 28% to 18% and reduced marble, granite, and stone to 5%. Construction costs are expected to fall by 3.5–4.5%. Developers may benefit, but whether the cost savings are passed on to homebuyers remains to be seen.
Why clarity matters
With multiple rates and conditions, GST on homes often confuses buyers. Affordable buyers pay just 1%, luxury buyers pay 5%, and ready properties attract none. For buyers planning their next move, being aware of these distinctions can mean big savings and fewer surprises.
Also Read: 18% GST on residential rental to impact rental real estate
