The September 2025 GST overhaul did not change these rates. Below we cover how the rates work, the affordable test as written in the notification, what happens to parking, PLC, club and maintenance charges, and four worked examples.

What is the GST rate on a flat in Bangalore in 2026?

  • Under-construction residential flat (not affordable): 5%, with no input tax credit for the builder.
  • Affordable residential apartment: 1%, with no input tax credit.
  • Flat sold after the completion or occupancy certificate: no GST.
  • Resale flat bought from an owner: no GST.
  • Crisil's report of 5 September 2025 on the GST reforms confirmed that the 1%, 5% and exempt treatments for housing stayed unchanged; the main change for real estate was a cut in GST on cement from 28% to 18%.

Why 5% is really 7.5% on two-thirds

The notification taxes construction at 7.5% (or 1.5% for affordable flats) but deems one-third of the total amount to be the value of land, which is outside GST. Tax on the remaining two-thirds works out to 5% (or 1%) of the full price. A 2021 advance ruling published by the GST Council sets out this arithmetic: 1.5% reduced by one-third for land gives an effective 1%.

For buyers, the practical point is simple: apply 5% or 1% to the full agreement value the builder bills. Do not apply it to two-thirds again.

What counts as affordable housing for 1% GST?

The definition in Notification 11/2017-Central Tax (Rate), as amended by Notification 03/2019 with effect from 1 April 2019, has two tests and both must be met:

  • Carpet area up to 60 sq m in metropolitan cities, or 90 sq m elsewhere. Bengaluru is one of the six named metropolitan cities, along with Chennai, Delhi NCR, Hyderabad, Kolkata and Mumbai, so the 60 sq m limit applies.
  • Gross amount charged not more than ₹45 lakh. The gross amount includes the construction consideration, the amount for land or undivided share, and any other amount charged by the promoter, including preferential location charges, development charges, parking charges and common facility charges.
  • It applies to projects that began on or after 1 April 2019, or ongoing projects where the promoter did not opt to stay on the old rates.
  • 60 sq m is about 646 sq ft of carpet area. Check the carpet area on the K-RERA project page, not the super built-up figure on the brochure.

Is GST payable on a ready-to-move flat with OC?

No GST is charged on a flat sold after the competent authority has issued the completion or occupancy certificate. FAQs issued by Gujarat's state tax office in May 2026 put the timing rule plainly: GST applies if any payment is received before the completion certificate; if the first payment is made after the certificate, no GST arises.

So 'ready to move' on a hoarding is not enough. Ask to see the occupancy certificate and check its date against your booking. If you book before the OC and pay instalments, GST applies on those payments. Our comparison of the two choices is at Under-Construction vs Ready-to-Move in Bangalore: Costs, GST, RERA and Risk Compared (2026), and you can browse Ready To Move, Bangalore for completed stock.

GST on parking, PLC, club membership and maintenance

  • Car parking and PLC: these are part of the gross amount in the affordable definition and are normally billed with the flat at the same rate. On PLC specifically, the GST Council at its 54th meeting (9 September 2024) recommended that location charges be treated as part of the composite construction supply, and the government issued a clarification on 11 October 2024. On 13 May 2026 the Punjab and Haryana High Court relied on that clarification to hold that PLC takes the same GST rate as construction before the completion certificate.
  • Club or common facility charges billed by the promoter with the flat: counted in the gross amount and taxed with it.
  • Monthly maintenance paid to the residents' association: exempt up to ₹7,500 per flat per month. Above that, if the association's turnover exceeds ₹20 lakh a year, GST at 18% applies. CBIC's 2019 circular treats the whole amount as taxable once ₹7,500 is crossed; a 2021 Madras High Court ruling taxing only the excess applies in Tamil Nadu. Details: Maintenance Charges in Bangalore Apartments 2026: GST, Corpus.
  • Corpus or sinking fund: a Tamil Nadu advance ruling of 7 May 2025 held that GST is payable on a corpus collected for future major works, because it is an advance for future services, and that the ₹7,500 exemption covers only regular monthly charges. Advance rulings bind only the applicant, so treatment varies; ask the builder for a GST invoice if GST is added.
  • Stamp duty and registration fee: these are state levies and are not part of GST.

Worked examples with real numbers

  • Example 1, affordable flat: a 1 BHK with 55 sq m carpet, base ₹41 lakh plus ₹3 lakh parking = ₹44 lakh gross. Both tests pass. GST at 1% = ₹44,000.
  • Example 2, the ₹45 lakh cliff: the same flat with ₹5 lakh parking = ₹46 lakh gross. The price test fails, so GST is 5% = ₹2,30,000. ₹2 lakh more in parking costs ₹1,86,000 more in GST.
  • Example 3, standard flat: a 3 BHK at base ₹1.10 crore, plus ₹4 lakh parking, ₹3 lakh PLC and ₹3 lakh club = ₹1.20 crore. GST at 5% = ₹6,00,000.
  • Example 4, same flat after OC: if the first payment is made after the occupancy certificate, GST = ₹0. Stamp duty and registration still apply (about 7.6% in Karnataka for property above ₹45 lakh, see Karnataka Stamp Duty and Registration Fee in 2026: What a Bengaluru Flat Really Costs).

Can the builder pass on input tax credit, or charge more GST?

Under the 2019 scheme the builder cannot claim input tax credit at the 5% and 1% rates, so there is no credit to pass on. Treat any line labelled as an ITC adjustment with care and ask for the basis in writing.

Check every invoice: it should show the builder's GSTIN, the rate, and the taxable value. GST on the flat should be charged at 5% or 1%, not 12% or 18%. An 18% line on a flat cost sheet usually relates to a separate service, such as advance maintenance, and should be shown separately.

For the national explainer on these rules, including how the 2019 change replaced the old 8% and 12% rates, see GST on Under-Construction Property in 2026, Explained. CREDAI has argued for raising the ₹45 lakh cap; what its leaders have said is in What CREDAI's National Leaders Say About GST, the ₹45-Lakh Cap and Delivery Delays in 2026.

How to keep GST down legally

  • Buy after the OC if the price difference makes sense.
  • If you are near ₹45 lakh with carpet under 60 sq m, check the total gross amount carefully. Parking or PLC that tips it over costs you 4 percentage points on the whole price.
  • Negotiate add-ons before GST: every ₹1 lakh removed from PLC, club or parking saves ₹5,000 of GST at 5%.
  • Do not agree to move value off the agreement into cash or side payments. It is illegal and leaves you without protection.
  • Remember TDS: on a purchase of ₹50 lakh or more you deduct 1% TDS separately from GST; see TDS on Property Purchase in India, Explained.
  • For budget projects near the affordable limit, compare the carpet areas in projects such as Salarpuria Sattva Misty Charm Kanakapura Road or browse Under 75 Lakh, Bangalore.