In the case of the sale and purchase of a property, GST is applicable only on under-construction properties whose Occupancy Certificate hasn't been received. GST is not applicable on ready-to-move-in properties with their Occupancy Certificates received!

GST on Purchase of Property:

Affordable Housing: 1% (without ITC)

Normal Housing: 5% (without ITC)

Commercial: 12% (with ITC)

(These are the GST rates post-1st April 2019.)

GST on Purchase of Property:

GST is not applicable on the purchase of Agricultural Land or Non-Agricultural Land. Since a land sale is neither considered a sale of goods nor a Supply of services!

GST on Maintenance Services:

Builders and societies can charge GST 18% on the monthly maintenance cost of the property, depending on certain criteria.

GST on Brokerage Services:

Real Estate dealers registered with GST, have to charge a GST of 18% on their brokerage services. Real estate representatives are entitled to register with GST if their annual turnover exceeds 20Lakhs.

What is the impact of GST on real estate?

The GST effect on the real estate sector is that real estate developers can claim the Input Tax Credit (ITC) on construction intakes like labour, cement, bricks, etc. under the GST regime. The ITC was brought to evade the tax-on-tax circumstances. Under ITS, tax charged on GST will be credited back to the developers.

GST on Rent?

The GST regime treats renting residential property for business purposes as a supply of services. An 18% GST rent on residential flats is assessed by the owner on such rental gain. Under this regime, if the rent amount per year exceeds Rs 20 lakh.