Here's a breakdown of GST laws on under-construction properties in India:

Current Rates (as of June 19, 2024):

• Regular Properties: 5% GST without Input Tax Credit (ITC) benefit. This applies to most under-construction residential and commercial properties.
• Affordable Housing: 1% GST without ITC benefit. This applies to residential units meeting specific criteria, including a maximum cost of ₹45 lakh and minimum area requirements varying based on location (metros vs non-metros).

Previous Rates:

• Before March 2019, a flat 12% GST rate applied to under-construction properties, with a 6% deduction for land value (effectively resulting in a 12% tax for buyers).

Key Points:

• GST applies to the value of services provided during construction, not the land itself.
• The developer pays GST on the procured materials and services used for construction.
• Buyers pay GST on the total value of the under-construction property (excluding the assumed land value).

Benefits of GST for Homebuyers:

• Compared to the pre-GST regime with multiple taxes, GST offers a simpler and more transparent tax structure.
• Reduced tax rates (currently 5% or 1% for affordable housing) can potentially lower the overall cost of buying under-construction properties.

Remember:

• These are the current rates, and they may be subject to change based on future decisions by the GST Council.
• For a more precise calculation of GST on your specific property, consult a tax professional or the developer.