Buying a Property in Mumbai – 9 Things You Need to Know About GST

Owning your own house is a dream for everyone, it gives you the freedom to live on your terms and allows total independence. Buying a house is a big investment and it needs a lot of introspection. From taking care of the finances to the paperwork it requires a lot of work.

One of the important things to take care of is the Tax process and as we all know that our Indian Government has replaced all the other taxes with GST (Goods and Service Tax). This article will help as a guide for those who are planning to buy a property in Mumbai and will provide all the necessary details one should know about GST to invest.

So in the article, we will be discussing 9 things you need to understand about GST if you are planning to buy a property in Mumbai.

What is GST?

GST is an acronym for Goods & Services Tax. It is a single, nationwide tax on products and services which replaces various indirect taxes levied by the central and state governments, GST has been in operation in India since 1 July 2017

• GST on affordable and non-affordable housing: If you are planning to purchase an under-construction property like a flat, apartment, or bungalow, then you have to pay GST at the rate of 1% for affordable housing and 5% for non-affordable housing. You also have to pay GST on developable plots. Developable land, in simpler terms, means the piece of land which has received all the necessary permission from the Municipal Corporation and local authorities for future development.

• GST on the completed projects: GST is not applicable on completed projects or ready-to-move property. Those projects who have received a completion certificate from any competent authority come ready to move or complete projects.

• GST is not applicable in the purchase of land: As the sale of land comes outside the purview of GST construction services, because it does not include the transfer of goods and services, hence GST is not applicable. Although stamp duty and registration charges continue to apply.

• Affordable property and calculation of GST rate: Any housing unit whose worth is more than 45 lakh and measurement is up to 60 square meters is considered affordable property. The area specified is only for metropolitan cities such as Mumbai, Delhi, Hyderabad, and the Chennai region. Any other place in India should cover an area of 90 square meters.

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