The government of India changed the GST tax slabs in real estate in April 2019. Different kinds of properties attract different rates of GST. An under-construction affordable housing property may attract a different GST rate than a non-affordable property.
First, let’s understand what kind of properties don’t attract GST?
If you are buying any ready-to-move-in or completed property, whether it is a flat or villa, where the completion certificate is issued, then no GST is applicable.
Sale of land/plot is a sale of immovable property. Therefore, no GST is applicable, and the land sale is exempted from GST.
Further, GST is not applicable on the resale of the completed property or land/plot.
Now, let’s understand what kind of properties attract GST.
If you are buying an under-construction property, GST is applicable. There are two GST rates for real estate residential projects - one is 1%, and the second is 5 %.
If you are buying any property categorised as affordable housing under the provisions of GST, you need to pay your developer 1% of the total value as GST. Affordable housing is a property that has a carpet area of 60 sq m in metro cities and 90 sq m in non-metro cities, and the value of such property is less than INR 45 lakh.
If the property is not affordable, then 5% GST is applicable. Non-affordable housing property is a property that has a carpet area of more than 60 sq m in metro cities and 90 sq m in non-metro cities, and the value of such property is more than INR 45 lakh.
For commercial properties, be it a shop, an office, a warehouse or any other commercial property, GST is charged at 12%.
For more information
GST on Real Estate
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GST on Construction -All you need to know
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