Ways to buy a home in India: costs and risks compared
How taxes, brokerage and risks differ between buying from a builder, buying resale, an auction or a family transfer.
The same ₹80 lakh home can carry very different costs depending on how you buy it. GST applies only to under-construction flats bought from a builder. Brokerage is usual on resale and rare on direct builder bookings. Stamp duty applies to almost every transfer, but some states give concessions on gifts within the family. The table compares the main purchase routes by cost structure and risk, not by any company's prices. Read it with the total cost worked example.
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| Purchase route | Taxes and charges on top of price | Brokerage | Good for | Watch out for |
|---|---|---|---|---|
| Under-construction flat from a builder | GST 5% effective (1% for affordable housing) with no input tax credit; stamp duty on agreement and/or sale deed per state; TDS 1% from ₹50 lakh | Usually none if booked directly; channel partners are paid by the builder | Payment in stages, RERA protections, new construction | Possession delays, carpet area versus super built-up pricing, extra charges for parking, club and PLC |
| Ready-to-move flat from a builder with completion certificate | No GST once the completion or occupancy certificate is issued; stamp duty and registration; TDS 1% from ₹50 lakh | Usually none if direct | Seeing the finished flat, no construction risk | Confirm the occupancy certificate really exists; unsold inventory may carry pending society formation |
| Resale flat in a housing society | Stamp duty and registration on the higher of price and circle rate; society transfer fee; TDS 1% from ₹50 lakh | Common, often 1–2% plus 18% GST each side (market practice, not law) | Established neighbourhood, visible maintenance record | Title chain, seller's loan, society dues, undisclosed cash demand |
| Independent house or plot | Stamp duty and registration; mutation in land records; conversion charges if land use changes | Common | Land ownership, freedom to build | Land record mismatches, unapproved layouts, agricultural land restrictions, boundary disputes |
| Bank auction (SARFAESI) | Stamp duty on the sale certificate; buyer usually pays dues stated in the auction notice, often on an 'as is where is' basis | None | Possible discount to market | Occupants, unpaid society and tax dues, limited inspection, full payment within short deadlines |
| Development authority or housing board allotment | Stamp duty on conveyance; allotment and transfer charges set by the authority | None for allotment | Lower-priced schemes through draws | Long timelines, lease-hold terms, transfer or conversion charges later |
| Gift or settlement within the family | Stamp duty, which some states reduce for close relatives; registration; no income tax on gifts from defined relatives | None | Passing property within the family | Each state defines 'family' differently; check concession conditions before executing |
| Buying from an NRI seller | Same stamp duty; buyer deducts TDS on capital gain at non-resident rates (Form 141 Schedule E for individual/HUF buyers from 1 Oct 2026) | As agreed | Wider choice of resale stock | Higher TDS, forms and deadlines; the seller may request a lower-deduction certificate |
GST rates on residential construction were left unchanged in the GST rate revision effective 22 September 2025. Check the current notification on the CBIC GST portal. Stamp duty rates and family concessions are set by each state, so check your state's registration department. The ₹50 lakh TDS threshold and rates come from the Income-tax Act, 2025 (section 393, in force from 1 April 2026); see the Income Tax Department e-filing portal. Brokerage figures are common market practice, not regulated rates.