GST on under construction flats is 5% of the agreement value for regular homes and 1% for affordable homes, with no input tax credit for the builder. A ready flat whose entire price is paid after the completion certificate or first occupation, and any resale flat, attracts no GST. These rates have applied since 1 April 2019 and were not changed by the GST rate overhaul that took effect on 22 September 2025.
Key takeaways
- 5% GST without input tax credit on non-affordable under-construction homes; 1% on affordable homes.
- The 5% is really 7.5% (3.75% central + 3.75% state tax) charged after a deemed one-third deduction for land.
- Affordable means up to 90 sq m carpet in Pune (60 sq m in six named metros) and a gross price of ₹45 lakh or less, so practically every flat in Balewadi pays 5%.
- No GST if the entire price is paid after the completion certificate or first occupation, whichever is earlier, and none on resale.
- GST is billed with each construction-linked instalment, on top of the agreement value.
- Maintenance billed by a residents’ association is exempt up to ₹7,500 per member per month, or if its turnover is ₹20 lakh or less.
GST on under construction flats: current rates
| Type of flat | Effective GST | Input tax credit |
|---|---|---|
| Under construction, non-affordable (most Pune flats) | 5% | Not allowed |
| Under construction, affordable (up to 90 sq m carpet in Pune and ₹45 lakh) | 1% | Not allowed |
| Ready flat, entire price paid after completion certificate or first occupation | Nil | Not applicable |
| Resale of a completed flat | Nil | Not applicable |
The rates come from the GST Council’s 33rd meeting recommendations (PIB, 24 February 2019), given legal effect from 1 April 2019 by Notification 03/2019-Central Tax (Rate), which amended Notification 11/2017. We checked the entries against the updated text of Notification 11/2017 hosted by the GST Council; the official notifications are published on CBIC’s GST portal.
How the 5% is worked out: the one-third land rule
The notification never says “5%”. It sets central tax at 3.75% for residential apartments other than affordable ones and 0.75% for affordable apartments. State tax is charged at the same rate, giving 7.5% and 1.5% in total. Paragraph 2 of the notification then deems one-third of the total amount to be the value of land, which is not taxed, so GST falls on the remaining two-thirds:
- Non-affordable: 7.5% × 2/3 = 5% of the total amount.
- Affordable: 1.5% × 2/3 = 1% of the total amount.
The land deduction is fixed at one-third whatever the actual land cost, so most cost sheets simply show 5% of each instalment. The developer must pay this tax in cash and cannot use input tax credit on cement, steel or contractor bills. The GST Council’s stated reasoning in 2019 was that unused credit had become a cost and that removing it should lead to cleaner pricing. The practical effect is that tax on inputs is now built into the base price rather than shown on your invoice.
What counts as an affordable flat for GST
For the 1% rate, a flat must pass both tests in the notification:
- Carpet area of no more than 60 sq m (about 646 sq ft) in metropolitan cities, or 90 sq m (about 969 sq ft) elsewhere.
- A gross amount of no more than ₹45 lakh, counting land and any other charges such as preferential location, development, parking and common-facility charges.
The metropolitan cities named are Bengaluru, Chennai, Delhi NCR (Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (the whole of MMR). Pune is not on the list, so the 90 sq m limit applies here, but the ₹45 lakh cap rules out practically every flat in Balewadi and Baner. A 3 BHK at Bhansali Bespoke in Balewadi has 1,186–1,212 sq ft of carpet (about 110–113 sq m, see the floor plans) and is listed above ₹2 crore, so it is clearly in the 5% bracket.
Worked examples: how much GST you pay
| Agreement value | GST at 5% | 30% instalment + GST | Total with GST |
|---|---|---|---|
| ₹1.95 Cr | ₹9,75,000 | ₹58,50,000 + ₹2,92,500 | ₹2,04,75,000 |
| ₹2.20 Cr | ₹11,00,000 | ₹66,00,000 + ₹3,30,000 | ₹2,31,00,000 |
| ₹2.90 Cr | ₹14,50,000 | ₹87,00,000 + ₹4,35,000 | ₹3,04,50,000 |
Under a construction-linked plan, GST is invoiced with each demand, so you pay it in step with the instalments rather than in one go. Stamp duty is a separate state levy on the agreement value or the ready reckoner value; see our guide to stamp duty and registration charges in Pune. If a lender is funding the flat, ask whether it will finance the GST portion, as our home loan guide for a ₹2 crore flat explains.
Compare like with like. A ready flat with its completion certificate at ₹2.04 crore costs roughly the same as an under-construction flat at ₹1.95 crore plus ₹9.75 lakh of GST, before you count the rent and pre-EMI you pay while waiting.
Considering a 3 or 4 BHK in Balewadi?
Bhansali Bespoke – The Hamptonns offers 3 BHK (1,186–1,212 sq ft) and 4 BHK (1,802–1,810 sq ft) homes in Laxmi Nagar, near Balewadi High Street. MahaRERA PM1260002600725.
When GST applies and when it does not
The 5% and 1% entries cover flats sold before completion, “except where the entire consideration has been received after issuance of completion certificate” or after first occupation, whichever is earlier. In practice:
- Booked and paid during construction: GST applies to the instalments.
- Bought after the completion certificate or first occupation, with nothing paid before it: no GST.
- Resale of a completed flat by its owner: no GST.
- Booked before the certificate, with the last instalment due after it: builders’ treatment of that final instalment varies, so get their position in writing before you sign.
In Pune, ask for the occupancy certificate issued by the planning authority and compare its date with the dates on your payment receipts.
GST on parking, maintenance and other charges
- Car parking, floor rise, preferential location and development charges billed as part of the apartment price are generally charged at the same 5%. The notification itself counts them in the gross amount for the affordable test.
- Advance maintenance collected by the developer at possession is a separate service and is usually billed at 18%.
- Club membership or amenity charges billed separately are also usually billed at 18%; check whether the clubhouse and other amenities are paid for inside the agreement value or outside it.
- Society maintenance after handover: CBIC’s Circular 109/28/2019-GST says contributions to a residents’ welfare association are exempt up to ₹7,500 per member per month, and an association with turnover of ₹20 lakh or less need not register at all. Above both limits, the circular says 18% applies to the entire amount, not just the excess, although that reading has been challenged in court.
At Bhansali Bespoke, estimated maintenance of ₹5,800–6,000 a month for a 3 BHK is under the ₹7,500 line, while the 4 BHK estimate of ₹9,000–9,100 is above it. Whether GST applies to the 4 BHK charge will depend on the society’s turnover once it takes over.
What GST 2.0 changed for home buyers
The GST Council’s 56th meeting on 3 September 2025 approved the rate overhaul now called GST 2.0, with new rates from 22 September 2025 (PIB release). Cement moved from 28% to 18%. The construction-service changes in the same release cover government works contracts and offshore oil and gas contracts; the residential apartment entries were not touched, so the 5% and 1% rates continue.
Cheaper cement lowers a developer’s costs, but because builders cannot claim input credit on residential projects, any saving reaches you only if the developer cuts the base price. Nothing passes it on automatically, so negotiate the price rather than expecting it.
GST checklist before you sign
- Ask for a cost sheet with agreement value, GST, stamp duty and registration on separate lines; listings use “all-inclusive” for very different things.
- Confirm the rate applied (5% or 1%) and that the GSTIN on invoices belongs to the promoter entity.
- Check that GST is charged only on instalments actually demanded.
- Get in writing how any instalment due after the occupancy certificate will be treated.
- Check how parking, club and advance maintenance charges are billed, and at what rate.
- Match the promoter name on invoices with the MahaRERA record; see how to check MahaRERA registration.
- Keep every tax invoice for refunds if you cancel and for your cost records when you sell.
Bottom line
For almost any under-construction flat in Balewadi, budget 5% of the agreement value as GST, paid with each instalment and added to stamp duty and registration. A ready flat bought after completion, or a resale flat, saves that cost but usually commands a higher base price. This is general information, not tax advice; for a specific purchase, ask a chartered accountant to review the cost sheet. For the current split at Bhansali Bespoke, see the price page or contact us.
FAQs
What is the GST rate on under-construction flats in 2026?
5% of the agreement value for regular homes and 1% for affordable homes, both without input tax credit to the builder. Legally this is 7.5% or 1.5% charged on two-thirds of the price, after a deemed one-third deduction for land. These rates took effect on 1 April 2019 and were not changed by the GST 2.0 overhaul of September 2025.
Is GST applicable on ready-to-move flats?
Not if the entire price is paid after the completion certificate is issued or after first occupation, whichever is earlier. Such a sale is outside GST, and so is the resale of a completed flat by its owner. If you booked during construction and part of the price was paid before the certificate, GST applies to those instalments.
Is GST charged on the full flat price or after a land deduction?
After a land deduction. The notification deems one-third of the total amount to be land, which is not taxed, and applies 7.5% to the remaining two-thirds. The result is an effective 5% of the full price, which is what most cost sheets show. The one-third figure is fixed, whatever the actual land cost of the project.
Can a home buyer claim input tax credit on GST paid for a flat?
No. A buyer purchasing a home to live in or hold is not making taxable supplies, so there is nothing to set the credit against. The developer also cannot claim input tax credit on residential projects under the 5% and 1% scheme. The GST you pay on instalments is therefore a straight cost, which is why it belongs in your budget from day one.
Did GST 2.0 reduce GST on flats?
No. The 56th GST Council meeting, effective 22 September 2025, cut GST on cement from 28% to 18% and changed several construction-service rates, but the residential apartment entries stayed at 5% and 1%. Lower cement costs help developers, but no rule passes that saving to buyers automatically, so it shows up only if the developer reduces the base price.
Is GST payable on car parking and maintenance charges?
Parking, floor rise and similar charges billed as part of the flat’s price are generally taxed at the same 5%. Advance maintenance collected by the developer is usually billed at 18%. Once the society takes over, maintenance is exempt up to ₹7,500 per member per month, or if the society’s turnover is ₹20 lakh or less, according to CBIC Circular 109/28/2019.
