GST on Residential Property: Exact Formula for Buyers

When you plan to buy a home in Hyderabad, understanding gst on residential property becomes one of the most important steps in your decision-making process. Many buyers focus only on the apartment price, but taxes like GST can significantly change the final amount you pay. Knowing how GST works helps you avoid confusion and plan your finances with confidence.

In Hyderabad’s fast-growing residential market, buyers today are more informed and careful. Whether you are purchasing your first home or upgrading to a premium apartment, clarity on gst on residential property can save you from unexpected costs. This blog explains everything in simple terms, so you can clearly understand when GST applies, how to calculate it, and how certain ready-to-move homes reduce this burden.

GST on Residential Property: What It Means for Hyderabad Home Buyers

GST on residential property applies only when you buy an under-construction home. In this case, the builder is considered to be providing a construction service, and GST is charged on that service portion. Once the property is completed and receives an Occupancy Certificate or Completion Certificate, GST no longer applies.

For Hyderabad buyers, this distinction is extremely important. The city has a healthy mix of under-construction and ready-to-move properties, especially in areas like Gachibowli, Financial District, Kokapet, and Narsingi. Choosing the right stage of purchase directly impacts whether you pay GST or not.

If you buy a ready-to-move apartment, gst on residential property is zero. You only pay stamp duty and registration charges, which are state levies and not part of GST.

GST on Property Purchase: Current Rates Explained Simply

To understand gst on property purchase, you must first know the applicable rates. These rates are decided by the government and are uniform across India, including Hyderabad.

Property Type	GST Rate	Applicability
Under-construction (Affordable Housing)	1%	No ITC
Under-construction (Non-Affordable)	5%	No ITC
Ready-to-move-in property	0%	GST not applicable
Resale property	0%	GST exempt

GST is charged only on the construction portion of the property. As per GST rules, 33% of the property value is treated as land value, which is exempt from GST. This means GST is applied only on 67% of the agreement value in under-construction homes.

GST on Under Construction Property: How to Calculate It

When you buy an under-construction apartment in Hyderabad, calculating gst on under construction property is fairly straightforward.

Step-by-step calculation:

1. Take the base agreement value.
2. Deduct 33% towards land value.
3. Apply GST on the remaining 67%.
4. Add this GST to your total payable amount.

Example:

• Agreement value: ₹60,00,000
• Land value (33%): ₹19,80,000 (GST exempt)
• Construction value (67%): ₹40,20,000
• GST @ 5%: ₹2,01,000

Total cost becomes ₹62,01,000, excluding stamp duty and registration.

This additional amount is often overlooked by buyers initially, which later affects loan planning and cash flow.

The Real Problem with Ready-to-Move Homes in Hyderabad

While ready-to-move homes save you GST, they usually demand very high upfront money. At the time of purchase, buyers are expected to arrange:

• 10-20% down payment
• Full stamp duty and registration charges (around 7–8%)
• Other statutory and maintenance charges

All these payments happen almost at the same time.

For a premium ready-to-move apartment in Hyderabad, this can mean arranging ₹70–80 lakhs or more upfront, even if the total property price is affordable through a home loan. Many genuine buyers struggle here, not because they can’t afford the home, but because arranging such a large amount together becomes difficult. This financial pressure causes many buyers to drop off at the last stage.

ASBL Spectra: No GST No Registration Offer

Recognising this exact pain point, ASBL Spectra, a ready-to-move gated community in Hyderabad’s Financial District, introduced a purchase structure that directly addresses this issue. Instead of burdening buyers with GST and registration payments upfront, the project restructures the transaction to make buying easier and more practical.

ASBL Spectra

ASBL Spectra is a ready-to-move residential project located in Financial District, offering spacious 3 BHK homes. Since the property is ready, gst on residential property does not apply in the usual way.

What makes this offer different?

• Booking amount: ₹5 lakhs
• GST & registration charges: Paid by the developer
• Buyer pays: Only the core apartment value
• Result: Much lower upfront cash requirement

Let’s understand this clearly with an example.

GST on Property Purchase: Normal vs ASBL Spectra Offer Comparison

Scenario 1: Normal Ready-to-Move Purchase (Without Offer)

• Flat value: ₹2.3 Cr
• GST @ 5%: ₹11.25 L
• Registration & stamp duty @ 7.5%: ₹17.11 L
• Other charges: ₹4.69 L

Total outflow: ₹2.63 Cr

• Loan amount: ₹1.77 Cr
• Buyer’s own funds: ₹80.86 L

Scenario 2: ASBL Spectra No Registration & GST Scheme

• Sale deed value (restructured): ₹2.65 Cr
• GST paid: ₹0
• Registration paid: ₹0

Total outflow: ₹2.65 Cr

• Loan amount: ₹2.35 Cr
• Buyer’s own funds: ₹26.5 L

How This Improves Affordability for Hyderabad Buyers

This structure significantly improves the buying experience:

1. Upfront capital requirement drops sharply
   From ~₹80 lakhs to ~₹26 lakhs.
2. Loan coverage improves
   From around 65% to nearly 90%.
3. Liquidity stress reduces
   Buyers don’t need to arrange large sums suddenly.
4. Better financial planning
   Funds can be preserved for interiors, savings, or emergencies.

This is a strong example of how understanding gst on residential property and structuring purchases smartly can make ready-to-move homes more accessible.

GST on Property in Hyderabad: Other Important Points

GST on amenities

GST may apply separately on amenities like parking or clubhouse if billed independently before possession.

GST on maintenance

Maintenance charges attract GST if collected before formation of the residents’ association.

Why Ready-to-Move Homes Make Sense in Hyderabad Today

Hyderabad’s infrastructure growth, especially around the Financial District, makes ready-to-move homes a strong choice. When GST is not applicable and upfront burden is reduced, buyers gain both peace of mind and financial stability. Projects that understand buyer pain points and structure purchases accordingly stand out in today’s market.

FAQs