East Bengaluru buyer answers
What counts as 'affordable housing' for the 1% GST rate?
By Gaurav Mongia, acre&key · Published 17 Oct 2026 · Updated 17 Oct 2026
Direct answer: In Bengaluru, a flat is an "affordable residential apartment" for the 1% GST rate only if its carpet area is 60 sqm or less and the gross amount charged is ₹45 lakh or less. Gross amount includes land or undivided share, parking, preferential location and other promoter charges on top of the base price. Check with your CA.
Disclosure: acre&key’s advice is free to buyers; we are an authorised sales partner for some projects and may be paid by the developer.
Verify with your CA: Whether your flat meets the affordable test, which charges count towards the gross amount, and what your invoice should show are tax questions. This page explains the published notification text. It is not a tax computation for your flat.
Verify with your lawyer: Carpet area and the price breakup come from your agreement for sale. Have your own property lawyer check that the agreement states them clearly before you rely on the 1% rate.
Plenty of buyers hear "GST is 1% under ₹45 lakh" and stop there. The actual test in the notification is narrower. It has an area limb and a money limb, and the money limb counts more than the base price. This page walks through both, using the notification wording, so you can ask the right questions before you book.
Where does the 1% affordable-housing rate come from?
The GST Council decided the 1% and 5% rates for housing at its 33rd and 34th meetings. The 34th-meeting decisions were published by PIB on 19 March 2019. The press note itself says the decisions take effect through Gazette notifications, which alone have the force of law.
For central tax, that notification is Notification No. 03/2019-Central Tax (Rate), dated 29 March 2019. It amends the main services rate notification (No. 11/2017-Central Tax (Rate)) and adds:
- item (i): construction of affordable residential apartments by a promoter in a residential real estate project that commences on or after 1 April 2019, or in an ongoing project where the promoter did not opt for the old rates, at 0.75% central tax (the GST Council rate compilation shows an equal 0.75% state tax)
- item (ia): construction of other residential apartments in the same kind of project, at 3.75% central tax (plus an equal 3.75% state tax in the compilation)
- a condition that the promoter takes no input tax credit, except as the notification's annexures allow
The PIB note describes the combined effective rates as 1% for affordable houses and 5% for others, without input tax credit. How the rate in the table becomes that effective figure depends on the notification's valuation rules, so leave that arithmetic to your CA.
What is the exact definition of an affordable residential apartment?
Clause (xvi) of the notification's explanation defines it. Sub-clause (a) covers a residential apartment in a project that commences on or after 1 April 2019, or in an ongoing project where the promoter did not take the old-rate option, which has:
- carpet area not exceeding 60 square metres in metropolitan cities, or 90 square metres in other cities and towns, and
- a gross amount charged of not more than ₹45 lakh ("forty five lakhs rupees" in the text).
Both conditions must hold. A 55 sqm flat priced above ₹45 lakh in total is not affordable under this test. Nor is a flat under ₹45 lakh whose carpet area is above 60 sqm.
Sub-clause (b) separately covers apartments in ongoing projects under certain central and state housing schemes listed in the notification. Most private Bengaluru projects fall under sub-clause (a), but if your project is under a government scheme, ask your CA which limb applies.
Does Bengaluru count as a metropolitan city?
Yes. The notification lists the metropolitan cities by name: Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon and Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR). Each covers its geographical limits as prescribed by an order of the Central or State Government.
So the 60 sqm limit is the one to use inside Bengaluru. For a project on the edge of the city, such as parts of the Hoskote or Budigere side, whether it sits within those prescribed limits is a fact your CA should confirm. Don't assume the 90 sqm limit applies just because the address says a village or a panchayat.
What does "gross amount charged" include?
This is where most confusion sits. The notification says gross amount is the sum total of:
- A. the consideration charged for the construction service,
- B. the amount charged for the transfer of land or undivided share of land, including by way of lease or sub-lease, and
- C. any other amount charged by the promoter from the buyer, including preferential location charges, development charges, parking charges, common facility charges and so on.
In practice, that means the ₹45 lakh test is applied to what the promoter charges you as a whole, not to the base price on the brochure. If parking, floor-rise or PLC, or a clubhouse or development charge pushes the promoter's total above ₹45 lakh, the flat no longer meets the definition.
What about stamp duty, registration fees and GST itself? Those are not amounts the promoter charges for its own supply in the same sense, but the notification does not list exclusions one by one. Ask your CA to map each line of your cost sheet to A, B or C. Our pages on floor-rise and PLC charges, car parking charges and hidden costs beyond the base price help you build that list.
For what undivided share means in the first place, see undivided share (UDS) explained.
Which carpet area is used for the 60 sqm limit?
The notification says "carpet area", and it takes the meaning of "apartment" from section 2(e) of the RERA Act. The RERA Act, section 2(k), defines carpet area as the net usable floor area of an apartment, excluding external walls, service shafts, exclusive balcony or verandah area and exclusive open terrace area, but including internal partition walls.
Sixty square metres is about 646 sq ft. That is carpet area, not super built-up area. A flat marketed at a larger "saleable" size can still be under 60 sqm on carpet. Check the carpet area in your agreement and on the project's Karnataka RERA page (how to check a project on the Karnataka RERA website). See carpet area vs super built-up area for the difference.
What should I ask the builder before I count on 1% GST?
- Is the project new (commenced on or after 1 April 2019) or ongoing? If ongoing, did the promoter opt for the old rates?
- What is the RERA carpet area of my unit, in square metres?
- What is the total the promoter will charge me, listing land or UDS, construction, parking, PLC, development and facility charges?
- Will the tax invoice show the affordable-housing entry, and the central and state tax lines?
- If the price or area changes later, how will GST be recalculated?
Put these in writing. The answers belong in your agreement for sale, which your lawyer should read (what to check in the builder's sale agreement).
What if the deal changes after booking?
Price and area are not always fixed at booking. If a carpet-area adjustment or an added charge pushes the flat past 60 sqm or ₹45 lakh, the affordable test may no longer be met for later supplies. Ask your CA how the invoices would change in that case. The general GST picture, including when GST is zero on a flat bought after the completion certificate, is on our page how much GST do I pay on a new flat, and when is it zero?.
Ongoing projects had a deadline. The notification required promoters of ongoing projects to choose the old rates by 10 May 2019 using the form in its annexure. Where no option was filed by then, the new rates were treated as chosen. That's why the promoter's answer to question 1 above matters.
Weighing a resale flat instead? New launch vs resale covers how GST differs between the two.
Frequently asked questions
Is GST 1% on every flat under ₹45 lakh in Bengaluru?
No. The flat must also have a carpet area of 60 sqm or less, because Bengaluru is a listed metropolitan city. The ₹45 lakh test is on the gross amount the promoter charges, which takes in land, parking and PLC as well as the base price.
Does parking count towards the ₹45 lakh limit?
Yes, under the notification's definition. Gross amount includes any other amount the promoter charges the buyer, and parking charges are named in the text, along with preferential location, development and common facility charges.
Is the 60 sqm limit carpet area or super built-up area?
Carpet area. The RERA Act defines carpet area as net usable floor area, excluding external walls, shafts, exclusive balconies and terraces. Sixty square metres is about 646 sq ft of carpet area.
Does the 90 sqm limit apply anywhere in Bengaluru?
The 90 sqm limit is for cities and towns that are not metropolitan. Bengaluru is named as metropolitan, within its prescribed geographical limits. For a project near the city's edge, ask your CA which side of those limits it falls on.
Can an ongoing project still charge the old GST rates?
Yes, if the promoter chose the old rates for that ongoing project by 10 May 2019 as the notification required. If it didn't, the new rates apply. Ask the promoter for proof of its choice.
References
- Notification No. 03/2019-Central Tax (Rate), 29 March 2019, clause (xvi) and Table items (i), (ia) (GST Council copy): https://gstcouncil.gov.in/sites/default/files/2024-05/download_2024-05-17t161406.556.pdf, accessed 17 Oct 2026
- PIB, Decisions taken by the GST Council in the 34th meeting held on 19 March 2019 regarding GST rate on real estate sector: https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1569106, accessed 17 Oct 2026
- GST Council, GST rates on services compilation, Heading 9954 construction services: https://gstcouncil.gov.in/sites/default/files/2024-02/gstservicerates.pdf, accessed 17 Oct 2026
- Real Estate (Regulation and Development) Act, 2016, sections 2(e) and 2(k) (K-RERA copy): https://rera.karnataka.gov.in/resources/staticpage/Real_Estate_Act.pdf, accessed 17 Oct 2026
This page explains public rules and processes. It isn't legal or tax advice. acre&key gives buyers advice for free. We are an authorised sales partner for some projects and may be paid by the developer.