Brokerage charges for buying or selling property in India: commission rates, GST and RERA rules
What real estate brokers in India charge buyers and sellers, how 18% GST applies, when commission is earned, RERA agent registration and how to keep the broker's bill under control.
On a resale purchase or sale in an Indian city, a broker commonly charges 1% to 2% of the deal value to each side, plus 18% GST if the broker is GST-registered. On a ₹1 crore flat that means ₹1,18,000 to ₹2,36,000 from the buyer and as much again from the seller. No central law fixes or caps the rate. It is whatever you agree in writing, so it is the most negotiable cost in the whole deal. Under the Real Estate (Regulation and Development) Act, 2016, agents who sell units in RERA-registered projects must themselves be registered with the state RERA authority.
The rates in this guide are market practice, not regulated figures. They vary by city, segment and deal size.
How brokerage is usually structured
| Structure | How it works | When you see it | Watch out for |
|---|---|---|---|
| Percentage of sale value, each side | Buyer and seller each pay 1–2% (+ GST) | Most resale flats in metros | Two commissions on one deal; agree when it is earned |
| Seller-only commission | Seller pays; buyer pays nothing | Some markets, higher-value homes, exclusive mandates | Price may be pitched higher to cover the fee |
| Flat fee | Fixed rupee amount regardless of price | Lower-value deals, some online brokers | Check what is included: paperwork, registration help |
| Builder channel partner | Builder pays the broker for new bookings | Under-construction and new launches | You should not pay twice; ask the builder directly |
| Exclusive mandate with retainer | Seller grants one broker exclusivity for a period | Premium or slow-moving property | Lock-in period and fee if you sell through someone else |
Rentals usually work on a different basis, often around one month's rent. That is outside the scope of this site.
GST on brokerage
Real estate brokerage is a taxable service at 18% GST. A broker who is registered, which is required once turnover from services crosses the registration threshold (generally ₹20 lakh a year, lower in some special category states), must charge it on the invoice. So:
- 1% commission → 1.18% total
- 1.5% commission → 1.77% total
- 2% commission → 2.36% total
An unregistered small broker may not charge GST, but should then not show GST on the bill either. Always ask for a proper invoice with the broker's GSTIN if GST is charged. Without one you cannot be sure the tax reached the government, and you lose the proof you need for your capital gains computation.
Worked example: both sides of one deal
Illustrative sale of a flat at ₹85,00,000, with both sides paying 1.5% + GST:
- Buyer's brokerage: ₹85,00,000 × 1.5% = ₹1,27,500; GST 18% = ₹22,950; total ₹1,50,450
- Seller's brokerage: the same ₹1,50,450
- The broker collects ₹3,00,900 in all, of which ₹45,900 is GST
For the seller, the ₹1,50,450 is an expense on transfer that is deducted from the sale price when working out capital gains. For the buyer, it becomes part of the cost of acquisition if you can prove it with an invoice. That lowers your gain when you sell in future. Try your own figures in the brokerage and net proceeds calculator.
RERA rules for agents
The RERA Act, 2016 brought real estate agents under regulation for RERA-registered projects:
- Section 9: an agent must register with the state authority before facilitating the sale of any plot, apartment or building in a registered project. The registration number should appear on their documents and advertisements.
- Section 10: agents must not facilitate sales in unregistered projects that require registration, must keep books and records, must not make false statements about the property or services, and must help the allottee get the documents they are entitled to.
- Complaints against registered agents can be filed with the state RERA authority under section 31.
Some states have added requirements. MahaRERA, for example, has required agents to hold a certificate of competency. Check the agent's registration on your state RERA website before you sign anything. For a resale of an old flat that is not part of a registered project, RERA registration of the broker may not be mandatory, but a registered agent is still easier to hold to account.
When is the commission earned?
This is where most disputes arise. Before the broker arranges any site visit, put these points in writing:
- The trigger. Is the fee payable at the token or booking amount, at the registered agreement, or at registration of the sale deed? Registration is the safest trigger for you.
- Refund on collapse. What happens if the deal falls through because of a title defect or the other side backing out?
- Exclusivity. Can you sell or buy through another broker or directly? If not, for how long?
- What is included. Does the fee cover document collection, the society NOC, appointment booking at the sub-registrar, and loan coordination?
- Payment. Pay by bank transfer against an invoice. Do not pay in cash.
The broker agreement and negotiation guide gives a clause-by-clause list.
How to lower the brokerage bill
- Negotiate the percentage before you see properties. Once you have seen a flat through a broker, they can claim the introduction.
- Ask for a cap. On high-value property a rupee cap, for example ₹1.5 lakh + GST, is common in negotiation.
- Sell directly where you can. Listing portals and society notice boards bring buyers, but you then do the screening and paperwork yourself.
- Buy directly from the builder. For new launches the developer usually pays the channel partner. If someone asks you for a fee on a direct builder booking, ask the builder in writing whether it is needed.
- Avoid double-paying. If two brokers worked on the same introduction, agree in writing which one is paid.
FAQ
Is there a legal maximum brokerage in India?
No central law caps residential brokerage. RERA regulates agents' conduct, not their fees. A few local rules or association guidelines exist, but in practice the fee is contractual.
Can a broker charge me without a written agreement?
A broker can claim a fee for an introduction under general contract principles, but an oral arrangement invites disputes. Always sign a short written mandate that states the rate and the trigger.
Is TDS deducted on brokerage?
If the payer is required to deduct TDS on commission or brokerage, for example a business or an individual subject to tax audit, TDS applies above the annual threshold. Most individual home buyers paying a broker for a personal flat are not required to deduct it, but check with a tax adviser if you run a business.
Does the buyer's brokerage count for the stamp duty value?
No. Stamp duty is on the consideration paid to the seller or the minimum value, whichever is higher. The broker's fee is a separate payment.
Sources
- Ministry of Housing and Urban Affairs — RERA Act, 2016 and links to state authorities
- MahaRERA — agent registration search in Maharashtra
- Karnataka RERA — agent and project registration in Karnataka
- CBIC GST portal — GST rates and registration thresholds for services
- India Code — full text of the RERA Act, 2016
