I
f you're buying a flat, villa, or plot in Hyderabad in 2026 and you don't clearly understand GST and RERA, you are not an informed buyer—you are a dependent buyer. Dependent on brokers, builders, and half-knowledge WhatsApp forwards.
This page exists to remove that dependency. No legal jargon. No government PDF copy-pasting. Just the mechanics of money.
01. THE GST MAZE: WHERE PROFIT DISAPPEARS
GST in real estate confuses people because it depends on WHAT you buy and WHEN you buy it.
A. THE GOLDEN RULE (CONSTRUCTION = TAX)
- GST APPLIES IF: You buy an under-construction flat, a villa with a construction agreement, or any property where payment is made before the Completion Certificate (CC).
- GST DOES NOT APPLY IF: You buy a Ready-to-Move flat (with OC received) or a Resale property.
- THE TAKEAWAY: If no construction service is being sold to you → No GST.
B. THE "AFFORDABLE" TRAP (CRITICAL FOR HYDERABAD)
- The Law: 1% GST applies only if the property is under ₹45 Lakhs AND smaller than 60/90 sqm.
- The Reality: In 2026 Hyderabad (inside ORR), almost nothing is under ₹45 Lakhs.
⚠️ THE WARNING
If a builder promises you 1% GST on an ₹80 Lakh flat, they are structuring the deal illegally to close the sale. You will face the penalty later. Expect to pay 5% GST.
C. THE "AMENITIES" LOOPHOLE (THE 18% SHOCK)
Most buyers calculate 5% GST on the total cost. This is wrong.
- The Flat: Taxed at 5%.
- The Amenities: Clubhouses, Legal Fees, Infrastructure Charges, and Car Parking are often taxed as "Services" at 18% GST.
💡 ACTION ITEM
Ask for the "Tax Breakup Sheet" before booking. Ensure they aren't hiding 18% charges inside a "Bundle Price."
D. THE BIG LIE: "GST IS INCLUDED"
- Builders use this phrase to hide the base price. GST is charged on the Agreement Value.
💡 THE TEST
Ask them to write down: "Base Price" vs "GST Component." If they hesitate, it's a red flag.
02. RERA: YOUR SHIELD (IF YOU HOLD IT RIGHT)
RERA is powerful, but it is not magic. "RERA Registered" does not mean "Safe." It just means "Listed."
A. WHAT RERA ACTUALLY GUARANTEES
- It ensures the project is declared, approvals are disclosed, and Carpet Area is defined.
- It does NOT guarantee construction quality, ROI, or that the builder won't run out of money.
B. CARPET AREA: THE ONLY METRIC THAT MATTERS
- Before RERA: Sold on "Super Built-up" (Imaginary space including common areas).
- After RERA: Sold on Carpet Area (The floor space inside your walls).
💡 PRO TIP
If a brochure in 2026 highlights "SFT" without specifying "Carpet Area," the builder is hiding efficiency issues. Always ask: "What is the Loading Factor?" (In Hyderabad, anything above 35% is theft).
C. THE "TS RERA" SEARCH HACK (NOBODY DOES THIS)
Don't just check the registration number. Go to the TS RERA Website.
- Search the Project.
- Click the "Litigation" Tab: Most buyers skip this. It reveals if the land has active court cases.
- Check "Mortgage Info": See if the specific tower you are buying is mortgaged to a bank. If yes, you need a "NOC" from that bank before buying.
D. RERA MISUSE: THE "MINOR CHANGES" CLAUSE
- Builders often sneak in a clause saying "Minor plan changes allowed."
⚠️ REALITY
Moving a wall or shrinking a balcony is NOT minor. RERA prohibits this without consent. Do not sign blindly.
03. THE HIDDEN TAX: TDS (SECTION 194-IA)
This is the most common mistake first-time buyers make.
- The Rule: If you buy a property worth ₹50 Lakhs or more, YOU (the buyer) must deduct 1% TDS from the payment to the builder/seller.
- The Trap: You do not pay the builder the full amount. You pay them 99% and deposit 1% directly to the Income Tax Department using Form 26QB.
⚠️ THE RISK
If you forget this, you get a notice from the IT department, not the builder.
04. REAL BUYING SCENARIOS (THE VERDICT)
SCENARIO A: The Under-Construction Flat
HIGH RISK
5% GST + 1% TDS
DELAY POTENTIAL
Risk: High (Delay).
Tax: 5% GST + 1% TDS.
Verdict: Buy only if the builder has a 10-year delivery track record.
SCENARIO B: The Villa + Plot Package
TITLE RISK
GST ON CONSTRUCTION ONLY
LAND VERIFICATION NEEDED
Risk: Title Fraud.
Tax: GST on Construction Value Only (Not on Land).
Verdict: RERA protects the structure, but verify the Land Title independently. RERA does not fix land ownership disputes.
SCENARIO C: The Ready-to-Move Resale
LOWEST RISK
0% GST
SAFEST CHOICE
Risk: Lowest.
Tax: 0% GST. 1% TDS (if >50L).
Verdict: The safest category for first-time buyers in 2026.
FINAL INTELLIGENCE BRIEF
GST and RERA are not "boring legal stuff." They determine your exit strategy.
- An informed buyer asks for the Base Price breakup.
- An informed buyer checks the 'Litigation' tab on TS RERA.
- An informed buyer deposits 1% TDS directly to IT Department.
- An informed buyer is untouchable.
Sujanand writes.
