GST on Under-Construction Flats in Chennai: When You Pay It and How Much

This is one of the most common questions we hear from apartment buyers comparing an under-construction project against a ready-to-move one — and it genuinely changes the total cost, not just the paperwork.

The core rule: completion certificate is what decides it

GST applies to the sale of an under-construction property because, technically, you're not buying a finished asset — you're paying for a service (construction) that's still being delivered. Once a project has received its Completion Certificate (CC) or Occupancy Certificate (OC) from the relevant authority, a sale after that point is treated as sale of immovable property, which is outside GST's scope. This is why a ready-to-move flat with CC/OC in hand attracts no GST, while the identical flat sold a few months earlier — before completion — did.

Current GST rates on residential property

Under the GST framework for real estate, affordable housing (flats meeting the specified carpet area and value criteria) attracts 1% GST without input tax credit, while non-affordable residential units attract 5% GST without input tax credit. These rates apply on the value of the under-construction unit, and builders are expected to price/quote inclusive or exclusive of GST clearly — always confirm which, in writing, before signing.

Why this matters when comparing projects

A slightly higher quoted price on a ready-to-move flat can still work out cheaper overall than a lower-quoted under-construction unit once you add 5% GST — always compare total out-of-pocket cost, not just the headline per-sq-ft rate.

What to check with the builder

• Whether the quoted price is inclusive or exclusive of GST
• The project's current construction stage and expected CC/OC timeline
• Whether GST applies to the specific unit type you're booking (affordable vs. non-affordable category)
• Whether any portion of your payment schedule falls before or after CC — since that boundary is what actually determines GST liability on that instalment

Rates, thresholds and exemptions above are the rules as commonly applied at the time of writing — tax and stamp duty rules change, so confirm current figures with a registered CA or the relevant government portal (Income Tax e-filing portal, tnreginet.gov.in) before relying on them for an actual transaction.