Under-Construction vs Ready to Move

Under-construction still wins in one case. We set it out below. That case is narrower than the market pretends. And one of its two classic arguments has quietly stopped working.

Under-construction vs ready to move: which is better?

Why does GST apply to one and not the other?

The split is legal, not commercial. A builder sells you a flat before it is finished. GST treats that as a construction service. So tax is charged. Then the completion certificate is issued, or the flat is first lived in. Now the sale is a transfer of property. That falls outside GST.

So the same flat can carry tax on Monday and none on Friday. One certificate does it. That is why a builder holding finished, unsold stock can hold a firm price. The launch price is not the guide.

We are not printing the current GST percentages here. The lower real-estate rates were notified by the GST Council in 2019. The slab structure has changed since. Our own tax set, as of 17 August 2026, lists four slabs. They are 0%, 5%, 18% and 40%. Some older property guidance still cites a 12% slab. It is not on that list. We can see the conflict. We could not open a source to settle it. So check the rate on the CBIC portal. Or check the developer’s own tax invoice, before you sign.

Has the tax argument for buying under construction stopped working?

Largely, yes. This is the part most guides have not updated.

Home loan interest on a self-occupied property is deductible under Section 24(b). Our tax set caps it at ₹2,00,000 a year, as of 17 August 2026. Interest paid while the flat is still being built works differently. You cannot deduct it in the year you pay it. You claim it later, in instalments, after you get the keys.

Here is the catch. Section 24(b) is an old regime deduction. It does not exist in the new regime. The new regime has been the default since FY 2023-24. Most salaried buyers are in it. For them the delayed deduction is worth nothing. The deduction itself is worth nothing.

That kills one of the two classic arguments for buying early. Check which regime you are in first. Only then price in a tax benefit. Our page on the old and new tax regimes gives the break-even numbers. Our page on home loan tax benefits covers the rules.

What does the price gap actually have to cover?

Do this arithmetic before you accept that an under-construction flat is cheaper. The discount has to pay for all of the following.

• The GST on the purchase, which the ready flat does not attract.
• Rent for every month until you get the keys. Then rent for the delay months you did not plan for.
• Loan interest on the disbursed tranches, running the whole time you are also paying rent.
• The cost of the deduction you cannot claim yet, if you are in the old regime.
• The risk that possession slips by two or three years, which nothing compensates you for in real time.

Add those up in rupees for your own case. On many launches the gap does not survive it. Use the rent vs buy calculator for the rent leg. Use the stamp duty calculator for the state levy. That levy applies either way.

What protection does RERA actually give me?

Real, but slower than people expect. RERA does four things. Projects above a size limit must register with the state authority. That must happen before they are advertised or sold. A share of buyer money must sit in a separate account, for that project only. There is a cap on what a promoter can take before the sale agreement is signed. And the buyer has a remedy if the handover date is missed.

We could not open the Act text. So we quote no percentages, caps or section numbers. Read them on your state RERA website. That site also lists the registration for your project. It lists the declared completion date too. Check that the number on the advertisement really exists there.

Now the uncomfortable truth. A remedy is not the same as a house. Buyers have won RERA orders and still waited years. Treat RERA as a floor on builder conduct. It is not insurance against delay.

When is under-construction actually the right call?

Three conditions, all of them together.

First, you can carry rent and loan interest together. For the whole build period. Plus a buffer of at least a year. Not on paper. In your real monthly cash flow. Test it on the home affordability calculator.

Second, the price gap after GST and carrying costs is still large. Not 5%. Large enough to pay you properly for years of risk.

Third, check the builder’s record. It has finished similar projects in the same city, on time. You can visit them. You can speak to the people living there. A record in another state is not a record.

If any one of those fails, buy ready. And here is the clearest signal of all. Are you buying under construction only because it is all you can afford? Then buy something smaller and finished.

Does a ready flat cost more to run?

Sometimes, and it is worth checking. An older block may charge more for upkeep. The lift may be ageing. The sinking fund may be short. Property tax is due on a finished home, so it starts at once. Our property tax by city page covers how the levy is worked out.

Against that, a finished block shows its record. You can see how common areas are kept. You can test whether the water works. You can check the promised facilities exist. In a new project all of that is a promise.