GST on Residential Properties

GST on Residential Properties

GST on Residential Properties [As per Govt. w.e.f 1st April 2019]


Is GST payable on purchase of residential property?

The effective GST rate applicable on purchase of under construction property – residential or commercial from a builder involving transfer of property in land or undivided share of land to the buyer, is 12% with full Input Tax Credit (ITC). The GST rate payable on construction services is 18%.

Do I have to pay GST when buying a house?

The remaining 15-20 per cent goes to the government as taxes. The ready-to-move-in properties are exempt from GST. Buyers need to only pay stamp duty and registration charges as taxes, which comprise 7-8% of the total property cost.

Who will pay GST? Buyer or Seller?

At each stage the seller pays GST to the government and collects it from the buyer on his invoice. So, the answer to the question is: The seller pays the GST to the government, and the buyer pays the GST to the seller. The responsibility to pay GST is on the seller.

Can you claim GST on purchase of property?

Under GST, developers get credit for the taxes paid after July 1 on the purchase of construction inputs like cement, steel, paints, bathroom fittings, etc, from the tax that a buyer will pay on the finished unit. But this is applicable only if the entire project was implemented in the GST regime.

Is GST payable on real estate?

GST is NOT payable on the sale and purchase of “residential premises”, unless the property being sold is new property. So, in most ordinary sales of residential real estate the vendor will not be required to pay GST, and the purchaser cannot be made liable to pay an amount for GST.

Do I have to pay GST on a commercial property purchase?

If you buy commercial premises;

  • You may be eligible to claim a credit for the GST included in the purchase price.
  • You purchase property from someone who is not registered or required to be registered for GST.
  • You purchase the property as a GST-free supply.

How much you pay GST on Real Estate?

At the 33rd GST Council Meeting held on 24th February 2019, new GST rates have been introduced for residential real estate which will come into effect from the 1st of April 2019.

The new GST rates on residential real estate transactions have been proposed as follows:

  • GST to be charged at 5% without Input Tax Credit (ITC) on residential properties that are not part of the affordable housing segment.
  • GST to be charged at 1% without ITC on residential properties that are included in the affordable housing segment.

GST on Residential Properties

Document checklist before Buying

Document checklist before Buying

Resale flat has changed multiple hands in the past, the process of its purchase involves several complex legal procedures and technical implications. Hence, before taking the final decision of purchasing a resale flat in Bangalore or in any other city in India, you should check and verify all the property papers and legal documents involved in the purchase in order to ensure that the flat has all the required government approvals and the seller has the right to sell it.

  • Absolute Sale Deed in present seller’s name
  • Khata Certificate & extract from BBMP
  • Latest tax paid receipt
  • If any loan outstanding on the property, latest statement from bank
  • Encumbrance Certificate from date of purchase till date
  • Agreement of sale & construction executed by developer in favor of seller
  • Latest electricity bill & receipt for the said flat
  • NOC from Apartment Association
  • Sanctioned Building Plan
  • Possession/occupancy certificate from builder
  • All title documents of land owner
  • Conversion Order issued by the concerned Authority
  • Registered development agreement (If in case of Joint Development Property)
  • Power of attorney/s if any
  • Photocopy of Society share certificate & Society registration certificate.
  • Joint development agreement, GPA, & Sharing/supplementary Agreement, between land owner and builder
  • Whether originals are available for inspection if no loan is taken?
  • A Copy of all registered previous agreements (in case of re-sale property)
  • RTC (Records of Rights and Tenancy Corps) or 7/12 extract

Be very careful when you buy a resale apartment, your lifetime savings should not go for a toss !

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