GST on Residential Property Purchase in 2025 – Rules, Rates & Buyer Checklist

What You Must Know in 2025

Thinking of buying your dream home?

Don’t sign anything until you understand how GST (Goods and Services Tax) affects your cost, rights, and returns.

With property being one of the biggest investments you'll make, knowing the tax implications could save you lakhs—or cost you if ignored.

Explore properties that follow 2025 GST rules, including ready-to-move and affordable homes with no or reduced tax impact.

Why GST on Property is a Deal-Breaker (or Deal-Maker)

Since the rollout of GST in 2017, property buyers have had one recurring question:

"Do I have to pay GST on my home purchase?"

Well, it depends — and the difference can be huge.

Under-construction properties? GST applies
Ready-to-move-in homes? No GST
Affordable housing? Lower GST rate

Understanding where your property falls is crucial before you commit to any agreement or EMI.

GST Rates on Residential Property (2025 Update)

Here’s a quick breakdown of GST rates applicable to residential real estate:

ITC = Input Tax Credit (disallowed on residential property purchases)

Affordable housing is defined as:

Carpet area ≤ 60 sq.m in metros
Carpet area ≤ 90 sq.m in non-metros
Price ≤ ₹45 lakh

Note: GST is not applicable on resale properties or ready-to-move-in units where the occupancy certificate (OC) has been issued.

Why This Matters More Than You Think

Here’s the twist: Builders often factor GST into your base cost, and it’s not always transparent. So, while the rate may be low, the net outflow could still be higher than expected.

Also keep in mind:

No Input Tax Credit for buyers → You can’t claim GST paid as a deduction
Total cost increases by 5–6% if you're buying an under-construction home
Bank loan disbursements sometimes don’t cover GST → You pay from pocket

Also Read: GST on Residential Property Purchase in 2025 – Rules, Rates & Buyer Checklist

Smart Buyer’s Takeaway: What Should You Do?

Ask for the OC – Ready-to-move homes with OC = No GST
Check GST rate before booking – Especially if project is nearing completion
Look into affordable housing eligibility – Could save you big on taxes
Ask builder for GST breakup – Transparency is your right

Final Thoughts: Don’t Let Tax Turn Dreams into Debt

GST may seem like just another tax, but when buying a home, it’s a silent cost that can add up fast.

The smart buyer is not just location-savvy but GST-aware.

So before you choose your tiles, choose clarity — it could save you more than you imagine.

For more real estate tips, property updates, and buyer guides, visit our property portal MaadiVeedu.com and explore in-depth blogs at blog.maadiveedu.com.

FAQs: GST on Residential Property Purchase

1. Is GST applicable on all residential property purchases?

No. GST is only applicable on under-construction properties.

There is no GST on ready-to-move-in homes where the occupancy certificate (OC) has been issued.

2. What is the current GST rate on under-construction residential property?

As of 2025, the GST rate is:

• 1% for affordable housing

• 5% for other residential units

Note: These rates are without Input Tax Credit (ITC).

3. Do I need to pay GST when buying a resale property?

No. GST is not applicable on resale or second-hand properties.

These are treated as completed properties and thus exempt.

4. Can I claim Input Tax Credit (ITC) on GST paid for my flat?

No. As per the current GST regime, homebuyers cannot claim ITC on residential property purchases.

5. How do I know if a property qualifies as affordable housing for GST?

A home qualifies as affordable housing if:

• It costs ₹45 lakh or less

• Carpet area is ≤ 60 sq.m (metros) or 90 sq.m (non-metros)

6. Is GST applicable on home loan EMIs or stamp duty?

No. GST is not applicable on:

• Home loan EMIs

• Stamp duty

• Registration charges

These are state levies and governed separately.