What is GST rate on affordable housing?

The GST rate on affordable housing is 1% (without Input Tax Credit) applicable to under-construction properties that meet the government's definition of affordable housing. This concessional rate was introduced in April 2019 to make home ownership more accessible for first-time buyers and lower-income segments.

Definition of Affordable Housing for GST Purposes

• Metropolitan Cities: Carpet area up to 60 sqm (645 sqft); property value up to ₹45 lakh.
• Non-Metropolitan Cities/Towns: Carpet area up to 90 sqm (968 sqft); property value up to ₹45 lakh.
• GST Rate: 1% (no ITC).

PMAY Linkage

Homes under PMAY (Pradhan Mantri Awas Yojana) that also meet the affordable housing criteria are eligible for both the 1% GST and the interest subsidy under the Credit Linked Subsidy Scheme (CLSS) making them doubly beneficial.

The 1% GST on affordable housing is one of the most significant concessions in Indian real estate taxation. Buyers of smaller homes priced up to ₹45 lakh benefit substantially from this rate compared to premium housing buyers.