Vat for residential apartments

This query is : Resolved

SSharad S Mahiswari (Querist)
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28 November 2012 We are constructing residential apartments on our land and want to sell to individual owners.

Is VAT applicable to the buyers to be paid to us for submitting in the government?

If yes at what rate it is to be collected?

Also, when is this VAT payable - at time of registration or as we receive the instalment.

V K Bajaj

V K Bajaj (Expert)
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29 November 2012 Please mention the name of your state. VAT is a state subject and VAT rules are being framed at state level.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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02 August 2025 Hey! Here’s the scoop on VAT for residential apartments:

1. **Is VAT applicable?**
Generally, **VAT is applicable on construction and sale of residential apartments** if you are a registered dealer under VAT laws and if the sale is before the issuance of the completion certificate (i.e., sale of under-construction property).

2. **Rate of VAT:**

* This varies by state but commonly ranges between **1% to 5%** on the value of the apartment.
* Some states may offer concessional rates for affordable housing or first-time buyers.

3. **When VAT is payable:**

* VAT is usually payable **as you receive the payment (instalments)** from the buyers, not at the time of property registration.
* You need to issue tax invoices and deposit VAT accordingly with the government.

4. **After completion certificate:**

* If you sell a **ready-to-move-in apartment** (after completion certificate is issued), VAT is typically **not applicable**; instead, stamp duty and registration charges apply.

**Note:**
Local VAT rules vary, so it’s best to check the specific state VAT act or consult a tax advisor in your area.

If you tell me which state you’re in, I can try to get more specific info!

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