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GST on Flat Purchase: A Guide for Home-Buyers

By IIFL Home Loans | Published On Sep 15 2023 5:48 AM 1 min read 3338 views 548 Likes
IIFL Home Loans

Buying a home or a new flat is a major milestone that signifies success and responsibility. Along with monthly payments, fees, and insurance, it's essential to consider taxes, including the Goods and Services Tax (GST) on residential property. This article clarifies the 2023 GST rate on flat purchases, empowering you to make an informed decision when buying your new home.

Caption: GST is levied on all under-construction properties.

GST on Residential Purchase

The Goods and Services Tax (GST) is a tax applied to goods and services in India.

When buying a home, it's crucial to consider GST, particularly for new or under-construction properties. GST is applicable only to such properties and may be levied on building work, construction materials, and services.

Understanding GST on under-construction flats and its difference from completed flats can be challenging, and Input Tax Credit (ITC) plays a significant role here. With the right paperwork, like a tax invoice, you can claim ITC under GST, which can help with GST charges. It's crucial to comprehend this concept to determine the actual cost of your home.

GST Rates Applicable on Properties in India

Before moving forward, it's essential to understand that GST on real estate varies according to the type of property you're planning to buy.

Here's a basic table showing how the GST on Flat Purchase and GST on Property might apply -

Type of Property

GST Rate

Apartment under construction (Affordable housing)

1% without Input Tax Credit (ITC)

Luxury flats (Under non-affordable housing)

5% without Input Tax Credit (ITC)

Ready-to-move new flat


Land purchases


Disclaimer: These GST on Real Estate rates are current as of now but are subject to change. Always check the most recent rates and seek expert advice before purchasing property to ensure you understand all GST implications.

How the GST Rates on Flat Purchase 2023 Impact Home Buyers?

In this section, we'll explain how GST rates on flat purchases in 2023, GST on residential property, and GST on house purchases can influence your home-buying decision. We'll break it down into clear points to give you a good understanding of how GST might impact you as a home buyer.

Budget Consideration: The GST rates on flat purchases in 2023 can affect your budget. If you're buying a new apartment or one that's still being built, you'll need to factor in GST costs. However, if you're buying a ready-to-move flat, you won't need to worry about GST.

Caption: Timely payment of GST for hassle-free home buying.
  • Affordability Factor: The GST on residential property is 1% for affordable housing and 5% for luxury properties. This could make a difference in whether a home is affordable for you.

  • GST on Land: Remember, there's no GST on a flat if you're buying land. This might make buying land and building your own home more attractive.

  • Impact on Price: The GST on house purchases can add to the price of your home. But with the right paperwork, you might be able to claim some of this back through the Input Tax Credit (ITC).

  • Constant Changes: The GST rates can change. It's always a good idea to check the latest rates and get professional advice before buying a home. This will help you understand the current GST on residential property rates and how they might impact your decision.

    Wrapping Up the Essentials

    Purchasing a home is more than just finding a perfect space to live. It's a financial commitment that requires in-depth understanding, especially when it comes to GST on residential property.

    Ready to turn your dream home into a reality? Explore the comprehensive range of home loan options offered by IIFL Home Loans to make your home-buying journey smoother. Click here to apply now!


    1. How can I save GST on a new flat purchase?

    You can potentially save on GST on a new flat purchase by claiming Input Tax Credit (ITC) with the correct documentation, such as a tax invoice.

    2. What is the new GST rate on flat purchases in 2023?

    The GST rate on flat purchases in 2023 is 1% for affordable housing and 5% for non-affordable or luxury flats without Input Tax Credit.

    3. Is GST levied on resale flats?

    No, GST is not levied on the purchase of resale flats.

    4. Is it mandatory to pay GST on residential property?

    Yes, GST is mandatory on residential property purchases, but it only applies to under-construction and new properties, not resale or ready-to-move flats.

    5. What are GST rates on construction materials in 2023?

    The GST rates on construction materials in 2023 generally range from 5% to 28%.


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