Is GST applicable on resale flat?

Real estate is one of the most significant pillars of our country’s economy. Under the previous tax regime, several taxes such as registration charges, stamp duty, service tax, and VAT were paid by the buyers. But currently, house buyers are required to pay GST on property purchase among many other taxes. But, is GST applicable on resale flat? Read below to know:

As per the latest GST tax structure, any residential project that has obtained a completion certificate, or any ready-to-move-in property can’t be classified as a service. This is why the GST rate is not applicable in such cases. So, in the case of resale of such properties, there will be no GST levied. However, registration charges and Stamp duty will be a separate component.

If I talk about under-construction properties, then such projects come under works contract and this is why they are classified as a service. In these cases, a single rate of 12% is applicable. The first buyer is required to pay the applicable GST to the developer and won’t be applicable in the case of a resale of properties. Again, registration charges and stamp duty will be separate.

I hope you like my answer to the “do you have to pay GST on a resale home” query.

I recently came across the query, do we need to pay GST for resale flat? Let me tell you GST applies only to the sale of under-construction properties, as these are considered as the supply of services. GST does not apply to finished and move-in apartments that have received a completion certificate from the official authority.

• The current GST rate on under-construction flats is typically 5% without input tax credit for regular housing and 1% for affordable housing.

• For resale flats, which are properties that have already been purchased and are being sold again after the initial sale, GST is not applicable. The reason is a resale flat is an immovable property, not a service.

• The sale of properties that are ready to live into and don't need any additional construction or services is exempted under the GST law.

• Buyers may still need to account for other expenses like stamp duty and registration fees, which differ by state, even if GST is not applied when a flat is sold again. These fees are distinct from any tax ramifications and usually vary from 5% to 8% of the property value.

I hope this resolves your query, is GST applicable on resale of flat.

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Someone recently asked me is GST applicable for resale flat? I have been studying GST closely hence, I could tell them the right answer. For your clarity I should tell you too that in India, GST is not applicable on the resale of flats. GST is levied only on the sale of under-construction properties or properties where the Completion Certificate (CC) has not been issued by the competent authority.

Is there GST on Resale Flat?

• If you purchase a flat that is still under construction or for which the Completion Certificate (CC) is yet to be received, GST is applicable.

• The GST rate is 5% for non-affordable housing and 1% for affordable housing (properties with a carpet area of up to 60 square meters and a value up to Rs. 45 lakhs).

• Resale flats are considered as "ready-to-move-in" properties where the CC has already been issued. Such properties are treated as immovable assets and not as goods or services under GST law.

• Therefore, GST does not apply to the resale of flats, regardless of the buyer’s or seller’s status.

• While GST is not applicable, the buyer may still need to pay other charges such as stamp duty and registration fees. These vary by state and typically range between 5% to 8% of the property’s sale value.

• The seller might be liable for capital gains tax depending on the duration of ownership.

• The GST regime is designed to tax goods and services provided during the construction phase. Once the property is completed and a CC is issued, it no longer qualifies as a service or product under GST law.

As I have mentioned previously, if you are buying a resale flat in India, GST is not applicable. You only need to account for stamp duty, registration fees, and possibly capital gains tax on the transaction. Your query for is GST applicable for resale flat should be solved.

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If you want to know

is there GST on resale flat? Let me help you.

The Goods and Services Tax (GST) in India is not applicable to the resale of residential flats.

GST is only applicable to the sale of under-construction properties and not on the sale of completed or ready-to-move-in properties.

When you buy a new property directly through a builder or developer, GST is applicable.

However, when you buy a resale property, it is treated as a transaction of immovable property.

This is all about

GST on flat resale.

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You must pay the Goods and Service Tax, or GST when purchasing a residence. Real estate buyers and developers are impacted by the GST. The Tax on real estate in India varies depending on the type, price, stage of construction, and other factors. However, if you are wondering whether, Is GST applicable on resale of flat, then I’d say that, there is no resale flat GST charges. The "Occupation Certificate" indicates that the building work has been finished and there is no service component to the transaction, hence GST is also not applicable in this case.

I hope this clarifies your query about whether Is GST applicable on purchase of old house?

In India, buyers of under-construction flats, apartments, and bungalows pay 1% GST for housing that is cheap and 5% GST for housing that is not. Purchases of real estate land are subject to the GST. In 2023, buyers of flats and apartments in developments that are still under construction in India's megacities will have to pay GST. It should be noted that purchasing apartments in completed developments is not subject to the GST.

You must pay GST if you purchased a single residential property prior to receiving the completion certificate from the appropriate authority. You are exempt from paying GST if the seller received the completion certificate prior to the agreement.

I’d like to conclude my discussion here about whether Is GST applicable on resale of flat. I hope this helps:)

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While purchasing a new property, you not only need to pay a huge amount on buying a flat but you also need to pay a lump sum amount on GST. But the most important question we should ask is GST on resale of flat applicable. I will try to answer this and solve your doubt in a simplified manner. 

Is GST applicable for resale flat?

Buyers purchasing a resale flat do not need to pay tax under Goods and Services tax (GST). Since the flat is a ready-to-move-in condition unlike other under-constructed flats and does not fall under the scope of a work contract, a buyer is not liable to pay GST at the time of purchase. 

But if a buyer is purchasing a property from the developer who has paid the GST during the construction work then the buyer has to pay the GST amount before buying the flat. So, what is the resale flat GST rate?  As per the recommendation of the GST Council 18 % tax should be levied on buyers for building construction. However, for an under-construction property, the rate would be 12%. I hope I was able to clear the doubt regarding ‘Is GST applicable on resale property?’

I hope you find this answer on GST on resale of flat informative.

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The Indian economy relies heavily on real estate. Previously, buyers were responsible for paying taxes such as VAT, service tax, stamp duty, and registration fees. However, under GST, under-construction properties are subject to a single rate of 12 percent, whereas completed or ready-to-sell properties are exempt from GST if a Completion Certificate (CC) has been obtained. So let’s see the stamp duty on resale flat.

GST on stamp duty and resale flat registration charges:

The Indian Stamp Act, 1899, specifies that all parties engaged in the transaction must pay stamp duty on sale documents. As a result, a sale deed must be registered, whether it is for an under-construction home, a ready-to-move-in flat, or a flat on the secondary market. As a result, you as a buyer must pay the necessary stamp duty and registration fees in his state, regardless of whether the property is new or old, as long as a sale deed is signed.

If you buy a property in Mumbai that will be ready in 2 years, you will pay 2% stamp duty and 1% registration fee. If you acquire a house on the secondary market, the fees stay the same. The same can be said about builder-supplied ready-to-move-in flats.

GST on resale property:

In concepts of the Goods and Services Tax, resale property buyers get a tax break (GST). Because, unlike under-construction dwellings, a ready-to-move-in flat is not subject to a work contract, the buyer is not charged GST for resale flat at the time of purchase.

Do we need to pay GST for resale flat?

If you buy a property from a builder who has paid GST on the house during its development, those taxes will almost probably be added to the total cost. This means that, even if no invoice is sent out and no mention of GST is made, the buyer will ultimately be responsible for paying GST on resale flat purchase.

Even if the GST has absorbed a number of states and county real estate taxes, stamp duty and registration are not among them. Despite repeated requests from businesses, industry leaders, and buyers, governments have resisted totally eliminating stamp duty and registration fees, which are the single largest source of revenue for states.

Now you know about the stamp duty on resale flat.