If your are home buyer and have been doing your window shopping, you might have understood how GST Calculation works and impact on your Home Budget. The Current GST on Under Construction property is 12% effectively after getting the input tax benefits.

GST Council headed by Deputy CM of Gujarat Nitin Patel is under the opinion of Reducing the GST on Under Construction Homes to 5% and 3% GST on Affordable Houses. The Panel has already submitted the report.

The news of GST rate being reduced from 18% to 5% GST is doing rounds for sometime but after our team interviewed couple of Builders in IT Capital Bengaluru, The benefit of GST reduction may not help the Home Buyers in any way. The Real Estate Builders & Developers are planning to increase base cost per SFT as the new proposed 5% GST is without input credit benifits which may indirectly effect the construction cost .


  1. Hi I need your expert advice. I booked an underconstruction flat in June 2017. My loan was disbursed in sep 2017. My possession is due and is supposed to be done by end of March 2019. I am being taxed 5% sales tax on my booking amount that was done in june 2017 and GST of 12% on remaining amount. I was advised I cannot get benefit of input tax credit as no input credit was allowed for constructed units as on date of gst implementation by govt. I am not sure what it means as the building was under construction at the time of GST implementation. Can you help me understand if I am being taxed correctly? Thanks a lot.

  2. Note: If GST is charged @12% then you are already got the benefit of input credits as actual GST is 18% and after the input, credit benefits its 12% in most of the cases. Regarding Sales Tax again 5% is charged to you in the year 2017 which is true. what I suggest is if any due amount is there to your builder then hold it for April first week as you are liable to pay 5% GST not 12 % effective from April 1st, 2019. it’s slightly tricky but you surely act smart with builder get the work.