GST on an under-construction purchase
Put GST and the rent paid during construction next to the headline discount, and the cheaper flat is frequently the more expensive one. The comparison to run before recommending a launch.
Your numbers
| Under-construction, all-in | — |
| Ready-to-move, all-in | — |
| Headline discount on paper | — |
| Delay at which the discount disappears entirelyBeyond this many months, the cheaper flat is the more expensive one. | — |
GST applies to under-construction property and generally not to a completed one where the certificate has been issued before sale. That single difference is a real price gap between two otherwise similar options, and buyers routinely compare the two without it.
Put it next to the rent a buyer keeps paying during construction and the discount on an under-construction flat often shrinks to far less than the headline suggests — sometimes to nothing.
What to include
GST on the under-construction price, stamp duty and registration on both, and the rent the buyer keeps paying until possession — including a realistic delay buffer, because projects overrun routinely.
Ready-to-move where the completion or occupancy certificate has been issued before sale generally attracts no GST, which is why the comparison has to be done all-in rather than on headline prices.
Worked example
Under construction at ₹70 lakh with 5% GST is ₹3.5 lakh of tax. Add 7% duties (₹4.9 lakh) and 42 months of ₹24,000 rent (₹10.08 lakh) and the all-in is about ₹88.5 lakh.
The ready flat at ₹78 lakh plus 7% duties is about ₹83.5 lakh. So the ₹8 lakh headline discount is actually a ₹5 lakh premium — the cheaper flat costs more.
The break-even sits around 21 months of waiting. Anything beyond that and ready-to-move wins on pure arithmetic, before counting the risk that the project is late or the developer struggles.
The honest guidance
A buyer paying rent, on a fixed timeline, buying their first home, is usually better off ready-to-move even at a premium. A buyer with time, somewhere to live and appetite for risk can make under-construction work — provided they pick the developer, not the price.
GST rates differ by segment and change. Confirm the rate applicable to the specific project, and check the RERA registration on the state portal rather than the brochure.
Questions
Is GST payable on a ready-to-move flat?
Generally no, where the completion or occupancy certificate was issued before the sale. That is one of the strongest arguments for ready-to-move and it is frequently left out of the comparison.
Why include a delay buffer?
Because delay is the main risk of buying under construction, and it converts directly into months of rent the buyer did not plan for. A year is a realistic buffer, not a pessimistic one.
Does GST apply to the whole price?
It applies to the construction component under the applicable scheme. Ask the developer for the exact break-up in writing rather than assuming, and have the buyer's chartered accountant confirm it.
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